Gross domestic product surged 9.9 percent in the fourth quarter of 2003 year-on-year and for the whole of 2003 grew 9.1 percent, which the government said was its fastest annual growth rate since 1997.

The State Statistical Bureau's Web site, www.stats.gov.cn, showed that growth in 1997 was 8.8 percent. In 1996 it was 9.7 percent.

The full-year result topped the 8.5 percent stated by China's tax chief last week and the average expectations of 8.6 percent presented in a Reuters poll of economists.

"It was a hard-won successful achievement after the outbreak of the SARS (news - web sites) epidemic and frequent natural disasters," Li Deshui, head of the State Statistical Bureau, said of the year's growth.

China, the world's fastest-growing major economy, is counting on strong growth to underpin crucial reforms such as recapitalising its ailing banks and shoring up inefficient state companies.

China has also become an increasingly important pillar of the global economy, turning itself into the world's factory and driving demand for other countries' raw materials and goods.

Its 2003 growth came despite the ravages of the deadly SARS virus, which thumped consumer spending, foreign investment and factory output in the second quarter last year.

In its first-ever revision of GDP (news - web sites) data, the bureau said third-quarter economic output was 9.6 percent higher than a year earlier, compared with the 9.1 percent reported previously.

The change reflected attempts by China to polish its data, the accuracy of which has long been doubted by economists.

Chinese industrial output ended the year in strong shape, up 18.1 percent in December on a year earlier. Factory output for all of 2003 rose 17 percent.

The economy was also helped by improving retail sales, which have been a relative weak spot. Sales were up 10.9 percent on a year earlier in December and 9.1 percent in all of 2003.

Second-quarter GDP was up just 6.7 percent on a year earlier, the government said in July, so the latest data showed powerful acceleration in the second half of the year.

"I believe it will still maintain the fairly fast growth momentum," Li said of the economy in the first quarter. Growth in 2004 would be "fairly fast" but he did not elaborate.

Strong investment and consumer demand would help, but exports -- which jumped nearly 35 percent last year -- would probably slow, he told a news conference.

SHIFT IN SPENDING

Beijing, concerned about a widening rich-poor gap and uneven development between the prosperous coast and lagging interior, is expected to shift spending more toward social services rather than direct economic stimulus.

Many economists see Chinese growth easing in 2004 as steps taken last year to cool off heated sectors such as property continue to have an impact.

"There was no general overheating in China's 2003 GDP growth. But there was in fact some overheating in certain regions and sectors," Li said, citing property, steel and cement.

This year Beijing is expected to ease back on state spending and take further steps to cool lending to industries seen in danger of overheating -- building up too much capacity that would leave them with excess debt and unsold products, raising the risk of business failures and damage to the rest of the economy.

"We are forecasting a bit more of a slowdown in 2004 against the background of the new full-year number, but we think the drivers of very rapid growth remain in place," said Tim Condon, chief Asian economist at ING Financial Markets.

For all of 2003 fixed asset investment -- a key source of concerns over overheating -- showed growth of 26.7 percent. December was up 23.3 percent on a year earlier.

"I think the authorities will manage to convince themselves that they have the situation under control and not take measures that are going to slow growth sharply at all," Condon said.

Not everyone believes that overheating risks are clouding China's outlook. Goldman Sachs is one example, currently forecasting China's 2004 GDP will rise as much as 9.5 percent.

One indicator of overheating, inflation, has been under control, with the benchmark consumer price index only 1.2 percent higher in 2003 than in 2002.

Although inflation has picked up, to 3.2 percent in the 12 months through December, the increase was due almost entirely to higher food prices that offset falls in most manufactured goods.

Most economists say inflation in the low or middle single digits is not a problem for China, which has grappled with mild deflation in recent years.