China's economy grew by 7.8% in the first half of the year, according to official figures.

That is even higher than the government's target of 7% growth for the year.

Heavy state spending and strong exports fuelled the expansion.

China has been one of Asia's best economic performers in recent years and is a favourite with foreign investors.

It officially became a member of the World Trade Organisation in December, making it easier for foreign firms to set up shop there.

Deflation concerns

During the first half of the year, the government increased its spending by 24.4% on infrastructure projects.

Economists say president Jiang Zemin is determined to end his 10 years of leadership with an impressive economic expansion.

Exports, which have been boosted by a weak currency, rose by 14% despite weak US and global economies.

Despite the strong overall growth and rising retail sales, the country is still struggling with deflation.

While retail sales grew by 8.6%, consumer prices were 0.8% lower than during the same period a year earlier.

China's official growth figures are treated with a certain degree of scepticism by foreign analysts.

The figures cannot be verified and some analysts say such strong growth could be implausible.