The biggest boost from the government's massive fiscal and monetary stimulus is probably over: most economists expect China's GDP growth to slow to an annualized pace of 9% to 10% in the second half of this year. Chinese firms appear to have started restocking inventories earlier than companies elsewhere in the world, economists say. So while inventory building will likely help growth in the U.S. and Europe in the rest of 2009, it's unlikely to do much more to boost China's figures.
Still, China's stimulus now seems to be more than strong enough to meet the official target of an 8% expansion for 2009. Officials are still publicly cautious about the world economy, with exports still down 22% from last year, and have repeatedly said the policy to support growth hasn't changed. But government statements in recent weeks have focused more on longer-term issues like funding for small businesses and controlling excess capacity. That's where economists are looking for new measures that would help keep the recovery going into 2010.
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