China’s gross domestic product (GDP) grew by 7.9 percent to 4,294 billion yuan (US$418 billion), which was within expectations of government analysts who had predicted the economy would grow by about 8 percent in this period.

Consumer demand at home was a major force in promoting the economic growth. In the first half of the year, the total retail volume of consumer goods grew by 10.3 percent to 1,791.5 billion yuan (US$216.5 billion). The retail volume of consumer goods in urban areas hit 1,121 billion yuan (US$135 billion) with a rate hike of 11.6 percent, while in rural areas it was 670.6 billion yuan (US$81 billion) with a rise of 8.1 percent.

Increased investments also contributed, Ye said. During this period, the total investment in fixed assets was 1,189.9 billion yuan (US$143.8 billion), an increase of 15.1 percent over the same period last year. Foreign funds actually used was US$20.69 billion, an increase of 20.5 percent over the same period last year.

From January to May, after considering the balance between profits and losses, Chinese industries and enterprises realized profits of 167 billion yuan (US$20 billion), a 30.4 percent increase over the same period last year. Of the profits, 90.5 billion yuan (US$10.9 billion) were achieved by state-owned and state share-holding enterprises. The total losses were 54.6 billion yuan (US$6.6 billion), a 10.4 percent decrease over the same period last year, of which, 33.5 billion yuan (US$4 billion) were lost in state-owned and state share-holding enterprises. In the first half of the year, 96.75 percent of industrial products of the country were sold, according to Ye.

This year, the state strengthened macro control over such industries as coal, metallurgy, building materials and petrochemical and improved the production and management conditions in these fields. The high-tech and machinery industries also developed. The electronics and telecommunication equipment manufacturing, metallurgy, electrified machinery and instrument manufacturing and transportation equipment manufacturing contributed 41.5 percent to the whole industrial growth. Quality and efficiency in agriculture also improved.

Consumer prices went up by just 1.1 percent in the first half. The prices of recreational and educational facilities and supplies as well as services were up by 9.3 percent and the housing price increased by 1.8 percent, while the prices for food, clothes, home appliances and transportation and communication continued to go down. The producer price of industrial goods rose by 0.3 percent over the same period last year, while the purchasing price of raw materials, fuels and power increased by 1.8 percent.

In the first half of the year, the per capita disposal income in urban areas was 3,424 yuan (US$414), an increase of 5.5 percent on the same period last year, while that for rural residents was 1,063 yuan (US$128), an increase of 4.2 percent.

Weakness in the Chinese economy were also noted by Ye Zhen: the too slow growth of farmers’ income, for example, and the reduction of demands for exports. Ye warned that China’s national economic growth may slow down in the latter half of the year under the influence of the world economy. However, Ye said that if the world economy stops deteriorating, the climate stays normal and macro regulations are observed, the Chinese economy should meet or exceed its 7 percent growth goal for the year.

(CIIC 07/18/2001)