Over the first five months of this year, fixed asset investment rose by 25 percent, real estate investment rose 38.2 percent, individual mortgage loans soared 88.8 percent, and housing sales increased 38 percent. This shows that China's real estate investment has been growing at a fast pace, so when the government took harsh measures to curb house prices, some feared that these measures would affect the Gross Domestic Product growth of this year. Even if the tightened measures do have some influence on the GDP growth, it is likely to happen after 2010.

In addition to growth in investments in the first half of this year, exports grew by 35.2 percent and imports by 52.7 percent. Trade surplus plummeted 42.5 percent to US$55.3 billion. That doesn't mean that China's economy is slowing down. Instead it shows that China's domestic demand is growing, promoting increased imports, especially an increased demand for mineral products.

Some have expressed the concern that the ongoing European sovereign debt crisis will surely impact China's export. Because the economies of the United States, Japan, Germany, France and other emerging markets have started to pick up, China's exports will not be seriously affected by the debt crisis.

China's total retail sales of consumer goods increased by more than 18 percent over the first five months of the year. It can be seen from increased sales of cars and household appliances and faster growing retail sales in rural areas. Auto sales jumped by 50 percent over the first five months and are expected to hit 17 million units this year.

With those three driving forces, China's economy is not likely to slow down in the second half of the year. Instead it will continue to grow rapidly.

The author is the director of the Finance Institute at the Chinese Academy of Social Sciences (CASS).

(This post was first published in Chinese and translated by Zhang Ming'ai.)