China's recovery is stronger than expected but Beijing will continue its looser lending policies to support growth, Vice Premier Li Keqiang said Monday, reported AP.

China's third-quarter economic growth accelerated to 8.9 percent, up from the previous quarter's 7.9 percent. The government says full-year growth should easily surpass its 8 percent official target.

Still, Li said, "We will continue the proactive fiscal policy and moderately relaxed monetary policy to maintain the continuity and stability of the macroeconomy."

Thanks to the government's 4 trillion yuan stimulus and a surge in lending by the state-owned banking industry, state-dominated industries such as construction, steel and cement have seen the biggest improvements, but private sector activity is rising. Consumer spending and other domestic consumption accounted for one-third of the latest quarter's growth.

Soaring bank lending has prompted concern about wasteful overinvestment by industry and concern that too much money is flowing into stock and real estate speculation. The government has imposed investment curbs in some areas and says it wants to promote new industries.