The Chinese economy expanded 7.9 percent year on year in the second quarter, as massive pump-priming and record lending pushed for a rebound from the worst growth in a decade, official data showed Thursday.

The figure is within the market expectation between 7.5 percent to eight percent.

The gross domestic product (GDP) grew 7.1 percent from the same period a year ago to 13.99 trillion yuan (2.06 trillion U.S. dollars) in the first half, said Li Xiaochao, spokesman with the National Bureau of Statistics (NBS) at a press conference.

Analysts said it adds confidence that China will achieve the full-year growth target of eight percent.

The world's third largest economy tumbled to 6.1 percent in the first quarter as exports shrank to a decade low.

Li said the government's stimulus package has had positive results.

He also said that many challenges lay ahead as the revival is not on solid footing, the recovery momentum is not stable, and the economic structure is still unbalanced.

According to the NBS data, investment contributed 6.2 percent of the GDP growth, and consumption did 3.8 percent. Exports, which slid for eight straight months, dragged down growth by 2.9 percent.

Zhuang Jian, senior economist with the Asian Development Bank told Xinhua Thursday that government-led investment and ample credit are the main reason behind the growth.

He expected the GDP will expand around 9 percent in the second half, bringing the full-year target of eight percent within reach.

Chinese shares jumped 0.71 percent to close at 3,211.30 at the morning session after the release of the upbeat Q2 data.

China's CPI fell 1.7 percent year on year in June, representing the worst contraction since October 2002. The inflation index at wholesale level dropped 7.8 percent, the lowest in a decade.

However, bank lending hit a record 7.37 trillion yuan in the first half, as the government looked to a moderately ease monetary policy to support economic recovery.

Li said the consumer prices are falling and the domestic demand remained inadequate, and the economy is still plagued by overcapacity.

He said international price changes have big impact on domestic prices, and the government will closely watch for price fluctuations to prevent inflation risks.

Since last November, the Chinese government has adopted a series of stimulus measures including a 4-trillion yuan investment package, tax cuts, and consumer subsidies to maintain growth and employment.

The government has set a full-year GDP growth target of 8 percent, a level which is rare in the developed economies, but is the minimum to maintain full employment in a nation of 1.3 billion people.

Li said the stimulus package was the reason the intensity of the economic rise is building up.

Benefiting from the massive government spending in the construction of railways, roads and infrastructure, the fixed asset investment rose 33.5 percent in the first six months, the most in five years.

The industrial output rose 10.7 percent last month, and the figure for the first half was 7.0 percent. The price-adjusted retail sales climbed 16.6 percent during January-June period.

Earlier this month, the International Monetary Fund raised its forecast of China's 2009 growth by 1 percentage point to 7.5 percent. The World Bank also adjusted its figure from 6.5 percent to 7.2 percent.

Fan Jianping, an economist with the State Information Center (SIC), a government think-tank, said as the revival is still fragile, any drastic changes to the macroeconomic policy will hurt the recovery signs.

Li said the government will stick to the pro-active fiscal policy and moderately ease monetary policy to strengthen the recovery momentum.

He also stressed to push forward the industrial restructuring and nurture new economic growth point, to improve the quality of the recovery.