China's economy grew by 8.7 percent in 2009, beating its target of 8 percent with a strong momentum that will see it continue to grow this year, according to government data released Thursday.

But while touting it as a successful rebound from the global plunge a year ago, some economists also expressed concerns about the cost the government has paid, advising a cooling-down of the economy that they say is risking further overcapacity, property bubbles and inflation.

According to data released Thursday by the National Bureau of Statistics (NBS), the gross domestic product (GDP) in the world's third-largest econ-omy rose by 10.7 percent in the fourth quarter of 2009, with the full year GDP growth averaging out to 8.7 percent, or 33.53 trillion yuan ($4.91 trillion).

The growth rate well surpassed the 8 percent target set by the Chinese government in March. The target was seen as essential to creating enough jobs and maintaining social stability, especially after a slow start to the year.

The country's GDP grew just 6.1 percent in the first quarter of 2009, 7.9 percent in the second quarter and 8.9 percent in the third quarter.

"Last year was the most difficult for China's economy in the new century," NBS director Ma Jiantang said at Thursday's press conference.

But the government's efforts, including implementation of the new fiscal policy and moderately loose monetary policy, as well as the government's 4-trillion-yuan stimulus package, have helped rein in the economic decline and spark an economic rebound, he said.

He described the country's economic development last year as a "harvest," saying the newly released figures confirmed a V-shaped recovery.

"The figure is not unexpected. The government has successfully achieved its objective, and that could boost people's confidence in the economy," Tian Yun, vice president of the China Macro Economics Institute, told the Global Times.

Meanwhile, China's recovery has helped other world economies pull out of the financial turmoil.

Its stimulus had regional impacts by boosting demand for East Asian exports. Since March, regional trade partners have benefited from a surge in Chinese imports, with the overall export volume growing at 10 percent, year-on-year, in recent months, according to a report by the World Bank released Wednesday.

"By stimulating its domestic economy so vigorously, China threw a much-needed lifeline to the rest of Asia. Korea, Taiwan, Japan and Southeast Asia benefited hugely from this recovery, and continued to through the end of the year as China began to re-inventory," Michael Taylor, chief economist of the China Economic Policy (London) Research Centre, told the Global Times.

The fiscal package, which has bolstered imports at a time of declines in global export demand, has also helped narrow the China-US trade imbalance.

"Besides, China didn't dump US Treasuries early in the year. This year, the US will be very much less vulnerable to such a move," Taylor added.

While recognizing the achievement China has made in the last year, economists warned that the stimulus measures have also created problems.

"Credit growth has shown signs of excessiveness, giving rise to concerns of inflation," said Zhuang Jian, an economist with the Asian Development Bank.

Figures from the central bank showed that tyuan-dominated lending last year hit a record high of 9.5 trillion yuan, almost double that of the previous year.

The bank lending will be limited to about 7.5 trillion yuan this year, Liu Mingkang, chairman of the China Banking Regulatory Commission, said at a financial forum Wednesday in Hong Kong.

Hong Kong media have even speculated that the central bank is going to raise the interest rate by 0.27 percentage points today, though the authorities didn't confirm that Thursday.

Wan Jun, an economist at the Chinese Academy of Social Sciences, warned that there was also a problem of production overcapacity.

"The massive investment in heavy industries such as steel, cement and coal-chemical, which are dominated by State-owned enterprises, is likely to lead to overcapacity and create waste," he said.

In October, the National Development and Reform Commission (NDRC) said it would address production overcapacity in six sectors: steel, cement, plate glass, coal-chemical, polycrystalline silicon and windpower equipment, indicating that the problem has already aroused the concern of the government.

The investment-centered economy has also been creating problems in the real estate sector, as some of the government money injected into State-owned enterprises has found its way to the housing market, further pushing up skyrocketing real estate prices last year.

Yi Xianrong, director of financial development at the Academy of Social Sciences Institute of Finance, warned of the potential dangers of the real estate bubble bursting if the government maintains a loose credit policy.

"The high property prices are like a bomb that can explode at any time if not handled properly," he said.

Despite the potential risks, most economists interviewed by the Global Times were optimistic about the country's economic outlook this year.

"I expect the growth rate to be around 9 percent, although China could grow even faster than that pace. But it would pay a higher price and create even more waste if it grows too fast," Wan said.

Wan also suggested that China focus on two issues in order to sustain its growth beyond this year.

"There is a need to emphasize domestic demand and domestic consumption, and particularly investment in sectors such as health and education," he said.

Earlier, at the Central Economic Work Conference held in December, the government vowed to focus on expanding domestic consumption, supporting agriculture and improving people's living standards this year.