The Chinese government is showing increased optimism on the recovery of its economy as lending and investment surge and manufacturing expands.

Gross domestic product (GDP), a major gauge of the economy, is likely to grow almost 8 percent year on year in the second quarter, a top official from the country's statistics bureau said yesterday.

"Judging from April and May figures and the growing trend, the GDP is expected to grow almost 8 percent in the second quarter, up from 6.1 percent in the first quarter and 6.8 percent in the fourth quarter of 2008," Guo Tongxin, an official from the National Bureau of Statistics (NBS), said in an article published on the NBS website yesterday.

Quarter on quarter, the GDP may climb more than 2 percent, Guo said.

NBS is expected to release mainstream economic data for the second quarter in mid July. But officials are also showing a tone of cautious optimism.

All the economic indicators, including GDP, industrial production, steel and power output, are signaling that China's economy is heading for a recovery, said Guo.

Su Ning, vice-governor of the People's Bank of China, said yesterday that the economy is showing positive signs and the government remains confident.

"Pushed by a series of policies, our economic conditions have shown some positive changes," Su said in a Beijing financial forum

"We have the confidence and ability to fight through the difficulties," the central bank official said.

"Chinese officials are showing more optimism now compared to a couple of weeks back," Dong Xian'an, chief economist, Industrial Securities, said.

"Though it is a couple days earlier to give a forecast for the second quarter, GDP growth from April to June should be around 7-8 percent," Dong said.

While the overall situation is stabilizing, the economy's fundamentals are still not solid, officials warned.