Expansion in the world's third biggest economy picked up pace again after growing by just 6.1 percent year-on-year in the first quarter, which was the slowest growth in more than a decade.

"The economy is rebounding and the strength of the recovery is increasing," National Bureau Spokesman Li Xiaochao said at a media briefing to release the data.

China's gross domestic product grew by 7.1 percent in the first half of 2009 compared with the same period a year earlier, according to the bureau.

This put China back on track to achieve its goal of 8.0 percent growth for the year, despite the impact of the global financial crisis that hit its crucial export sector particularly hard.

However, the government warned pitfalls still lay ahead.

"There are many difficulties and challenges existing in the current national economic performance," Li said.

"The base for recovery is still infirm. The momentum for picking up is unstable. The recovery pattern is unbalanced and thus there are still uncertain volatile factors."

Before the global economic crisis struck, China had experienced double-digit annual growth from 2003 to 2007, and again for the first two quarters of last year.

To fight the downturn, the government implemented a four-trillion-yuan (580-billion-dollar) stimulus package in November last year that had dramatic results.

Li described the impact of the package as "remarkable," and economists expressed similar sentiments.

"China's second quarter GDP growth beat market expectations," said Lu Zhengwei, a Shanghai-based economist with the Industrial Bank.

"It means the country's economy has achieved a very strong rebound thanks to continued expansionary fiscal policies and the central government's stimulus measures."

Lu said China's economy would likely grow by 8.0 percent growth in 2009, in line with the government's target.

The figure is generally seen as the minimum growth needed to create enough jobs and prevent major social unrest in the nation of 1.3 billion people.

"But whether the strong rebound momentum can continue remains uncertain," Lu said.

"Although private sector investment has picked up, growth still relies heavily on the central government's expansionary policies. Also there is no sign of China's trade performance turning better this year."

China's exports dropped 21.4 percent year-on-year in June, the government said last week, the eighth straight monthly decline.

However, China's industrial output, which illustrates activity in the nation's millions of factories and workshops, expanded by 9.1 percent in the second quarter of 2009 from a year earlier, the bureau said.

In June, industrial output increased by 10.7 percent, and by 7.0 percent for the first half of 2009.

China's urban fixed asset investments, a measure of government spending on infrastructure, rose 33.6 percent in the first half of 2009 compared with the same period a year earlier, the statistics bureau said.

Investments in urban fixed assets increased by 35.3 percent in June year-on-year, according to the bureau.

China's consumer price index, the main gauge of inflation, fell 1.7 percent in June compared with the same month a year earlier, a further decline from May's drop of 1.4 percent, the bureau said.

However analysts said inflation could make a quick return and prove a problem for China's economic planners.

The consumer price index grew 5.9 percent in 2008 but weakened significantly as the global crisis slowed China's economy.

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