Food for thought: The growth highlighted China's continued reliance on stimulus spending. What happens when all the money is exhausted.?
China's stimulus-fueled stock boom alarms Beijing
BEIJING: The crowd in the packed Guosen Securities office jostles around buzzing printers that spit out receipts for their share buys, hoping to cash in on China's stimulus-fueled stock market boom.
"The central government has to fulfill their promise of 8 percent economic growth," said Wu Jun, 62, a retired civil servant who has part of his life savings of 50,000 yuan ($7,300) and lives on a 2,000 yuan-a-month ($290 a month) pension in stocks.
"They'll come up with measures to keep the market in good shape."
But while investors expect the market - up more than 80 percent this year - to keep rising, Chinese leaders are alarmed.
They worry that too much of the $1 trillion lending binge by state banks that paid for China's nascent revival was diverted into stocks and real estate, raising the danger of a boom and bust cycle and higher inflation less than two years after an earlier stock market bubble burst.
Beijing is trying to tighten credit controls without derailing the economic revival or causing a market crash - a risky path at a time when Chinese leaders say a recovery is not firmly established.
"It's a very serious threat. The Chinese government is walking a tightrope," said Mark Williams, Asia economist for Capital Economics in London.
"There is the question of what happens if they rein in lending, because there is really no strong evidence that private sector demand is picking up."
Any hiccup in China's recovery could dent its rising demand for imported industrial raw materials and consumer goods, damaging hopes it might lead the global economy out of its worst downturn since the 1930s.
China's growth accelerated in the latest quarter to 7.9 percent over a year earlier while the United States and Europe struggle with recession.
The surge was driven by Beijing's 4 trillion yuan ($586 billion) plan to insulate China by pumping up domestic demand with heavy spending on building highways and other public works.
But the growth - up from 6.1 percent the previous quarter _ highlighted China's continued reliance on stimulus spending.
The big gains were in construction and other stimulus-fueled areas, while retail spending and other private sector activity lagged.
Bank credit soared to a record 7.1 trillion yuan ($1.1 trillion) in the first half of the year and the rate of lending is accelerating.
Loans in June expanded to more than double the May level at 1.5 trillion yuan ($220 billion).
China's stimulus-fueled stock boom alarms Beijing
BEIJING: The crowd in the packed Guosen Securities office jostles around buzzing printers that spit out receipts for their share buys, hoping to cash in on China's stimulus-fueled stock market boom.
"The central government has to fulfill their promise of 8 percent economic growth," said Wu Jun, 62, a retired civil servant who has part of his life savings of 50,000 yuan ($7,300) and lives on a 2,000 yuan-a-month ($290 a month) pension in stocks.
"They'll come up with measures to keep the market in good shape."
But while investors expect the market - up more than 80 percent this year - to keep rising, Chinese leaders are alarmed.
They worry that too much of the $1 trillion lending binge by state banks that paid for China's nascent revival was diverted into stocks and real estate, raising the danger of a boom and bust cycle and higher inflation less than two years after an earlier stock market bubble burst.
Beijing is trying to tighten credit controls without derailing the economic revival or causing a market crash - a risky path at a time when Chinese leaders say a recovery is not firmly established.
"It's a very serious threat. The Chinese government is walking a tightrope," said Mark Williams, Asia economist for Capital Economics in London.
"There is the question of what happens if they rein in lending, because there is really no strong evidence that private sector demand is picking up."
Any hiccup in China's recovery could dent its rising demand for imported industrial raw materials and consumer goods, damaging hopes it might lead the global economy out of its worst downturn since the 1930s.
China's growth accelerated in the latest quarter to 7.9 percent over a year earlier while the United States and Europe struggle with recession.
The surge was driven by Beijing's 4 trillion yuan ($586 billion) plan to insulate China by pumping up domestic demand with heavy spending on building highways and other public works.
But the growth - up from 6.1 percent the previous quarter _ highlighted China's continued reliance on stimulus spending.
The big gains were in construction and other stimulus-fueled areas, while retail spending and other private sector activity lagged.
Bank credit soared to a record 7.1 trillion yuan ($1.1 trillion) in the first half of the year and the rate of lending is accelerating.
Loans in June expanded to more than double the May level at 1.5 trillion yuan ($220 billion).
