More confidence, time needed

Zhuang Jian, a senior economist with the Asian Development Bank office in Beijing, told Xinhua that although sales of cars and homes had picked up in recent months, Chinese consumers needed to have more confidence before they would spend and invest more. The government needed to take new, responsive measures as new situations emerged.

Zhuang also noted that contradictory data had been seen from time to time in earlier years in China, when the country's economy was maturing,and there still might be some difficulties ahead.

He added that it had only been half a year since the major stimulus plan was announced and it would be wise to wait for another quarter to see the effects of the stimulus package.

"The stimulus has already paid off, with rising investment in government-supported projects. As the weather in the second quarter is more suitable for construction work, we can expect this type of investment would continue to grow," Zhang Liqun said.

China's fixed-asset investment jumped 28.8 percent to 2.81 trillion yuan in the first quarter. The growth pace accelerated further to 34 percent in April.

Stock market upbeat

Stock market investors are interpreting the economic data positively. The benchmark Shanghai Composite Index was up more than 44 percent this year as of Wednesday.

Zhang Liqun said that after last year's plunge, when the market sank more than two-thirds from its peak in mid-October 2007, equities had rallied along with regional markets. Investors had gained confidence that an economic recovery was at hand.

Analysts said they expected further gains in shares, car sales and housing transactions in the coming months, but they warned that economic data could still be confusing and disappointing.

The ADB forecast in a March report that China's economy might grow 7 percent this year.

"Judging from current conditions, economic growth might even exceed that forecast," Zhuang said.

(Xinhua News Agency May 14, 2009)