China signals no abrupt post-GDP policy shift

BEIJING (Reuters) - China's annual GDP growth quickened to 8.9 percent in the third quarter, in line with market expectations.

For graphics on Thursday's data:

GDP here

CPI here

IP here

SALES here

Following are the highlights of a news conference by Li Xiaochao, the spokesman of the National Bureau of Statistics.

POLICY OUTLOOK

"We have stressed the proactive fiscal policy and appropriately relaxed monetary stance to keep consistency and stability in economic policy -- according to my understanding, that means no change in policy.

"In the next phase, we will stick to the continuity and stability of our macro economic policy.

"We will fully implement and improve the stimulus package to address the global financial crisis and enhance the flexibility and effectiveness of macro economic policy to seek stable and relatively fast economic growth."

ECONOMIC OUTLOOK

"We can say with certainty that achieving 8 percent GDP growth this year is completely assured. Without doubt."

CURRENT STATE OF THE ECONOMY

"China's economy is at a vital moment of recovery and stabilization. The foundations of the recovery are still not solid, the pressure on external demand is still serious and it is still an arduous task for us to expand domestic demand and adjust the structure of the economy.

DOLLAR

"As for the dollar's depreciation, we have to emphasize that it is another demonstration of the uncertainty we face right now in the external environment."

INFLATION

-- September CPI was up 0.4 percent versus August and PPI was up 0.6 percent.

-- Consumer and producer prices have been rising month on month since July, narrowing the year-on-year declines of both the CPI and PPI gauges.

"So we do not have a problem of inflation."

But he said China must pay close attention to inflationary expectations -- as the cabinet highlighted on Wednesday.

INVESTMENT

"What we need to emphasize is that although government-initiated investment grew fast, it mainly went to weaker sectors of the economy, so it will be conducive to relatively fast economic development in the long run."

COMPOSITION OF GDP IN FIRST THREE QUARTERS

-- Investment contributed 7.3 percentage points to headline growth of 7.7 percent, and consumption accounted for 4.0 percentage points.

-- Net exports subtracted 3.6 percentage points.

(Reporting by Simon Rabinovitch, Aileen Wang and Zhou Xin; Editing by Alan Wheatley)