China says effectively turning the corner on the economy

China's economy strode further along the road of recovery from its slowest growth in three years, data for October showed on Friday, as infrastructure investment accelerated and output from factories ran at its fastest in five months.

Data on Saturday showed the trade surplus ballooned to its biggest in 45 months in October as export growth darted to a five-month high above 11 percent, surpassing expectations and adding to other data that suggest a less urgent need for new economic stimulus measures.

Annual economic growth slowed to 7.4 percent in the third quarter - its weakest since early 2009 - leaving the economy on track to mark its most sluggish year since 1999. But central bank head Zhou Xiaochuan cautioned on Thursday that external risks still loomed large and the People's Bank of China had policy room to respond if necessary.

SUSTAINABLE GROWTH

Zhang said China's economic slowdown this year had been caused by both weak global demand and government steps to adjust economic structures to put the economy on a more sustainable footing for the future.

Government officials have said repeatedly that they intend to use a period of slowing growth to make a series of adjustments to economic policy settings, particularly around prices administered by the state, that might otherwise risk fuelling inflation. Such reforms are regarded as crucial, both by foreign analysts and government think- tanks, if China is to maintain robust growth needed to close a yawning wealth gap and support an urbanisation drive core

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