The Overall Economic Performance is Good in the First Half of 2005

Zheng Jingping

Spokesman
National Bureau of Statistics of China
20 July 2005

In the first half of this year, regions and departments at all levels made all efforts in implementing the scientific approach to development and various policies set by the Central Party Committee and State Council on economic work, with the aim to consolidate and promote the achievements brought by macro-control. As a result, fairly good overall economic performance was recorded in the first half of this year.

1. Stable and rapid economic growth. According to preliminary estimation, the gross domestic product (GDP) of China in the first half of this year was 6,742.2 billion yuan, a year-on-year change of 9.5 percent, it was 0.2 percentage points lower as compared with the growth rate for the first half of 2004. Of this total, the value-added of the primary industry was 670.7 billion yuan, up by 5.0 percent; the value-added of the secondary industry was 3,963.5 billion yuan, up by 11.2 percent; and the value-added of the tertiary industry was 2,108.0 billion yuan, up by 7.8 percent.

2. Encouraging agricultural production with bumper harvest of summer crops. According to preliminary estimation, the total output of summer grain reached 106.27 million tons, up by 5.1 percent or 5.12 million tons. Good harvest is also expected for the production of early rice. Rapid growth was seen in animal husbandry industry; the year-on-year change of the total output of meat was up by 6.2 percent.

3. Rapid industrial production. In the first half of this year, the total value-added of the industrial enterprises above designated size was 3,227.4 billion yuan, a year-on-year growth of 16.4 percent (it was 619.1 billion yuan in June, up by 16.8 percent). Of this total, the growth of state-owned and state-controlled enterprises was 11.6 percent, the growth of share-holding enterprises was 18 percent, and that of enterprises funded by investments from foreign business or from HK SAR, Macao SAR and Taiwan province was up by 15.7 percent. The growth of heavy industry was 16.9 percent while that of the light industry was 15.4 percent. Analyzed by products, the power generation and coal production was up by 13.2 percent and 9.7 percent respectively, the production of crude steel and rolled steel rose by 28.3 percent and 25.9 percent. The production of microcomputers and integrate circuits rose by 61.3 percent and 5.6 percent. The production of motor vehicles went up by 6.5 percent, of this total, that of cars rose by 5.2 percent. In the first half of this year, the production and marketing situation was good. The sales ratio of industrial enterprises at and above designated size was 97.54 percent, or 0.3 percentage points higher than that in the same period last year. The growth rate of profits made by industrial enterprises declined. In the first 5 months of this year, the profits made by industrial enterprises above designated size stood at 496.8 billion yuan, a year-on-year change of 15.8 percent, or 27.9 percentage points lower as compared with the same period of 2004.

4. Comparatively stable growth of investment in fixed assets. In the first half of this year, the total investment in fixed assets was 3,289.5 billion yuan, a year-on-year rise of 25.4 percent, or 3.2 percentage points lower as compared with the same period of 2004. Of this total, the investment in urban areas reached 2,796.7 billion yuan, up by 27.1 percent, or 3.9 percentage points lower (it was 824.8 billion yuan in June, up by 28.8 percent), and the growth of investment in real estate development was 23.5 percent, or 5.2 percentage points lower (it was 154.9 billion yuan, up by 21.1 percent in June). The investment in coal, electricity, oil and transportation had been enhanced. Among which, the investment in coal mining and washing grew by 81.7 percent year-on-year, that of the extraction of petroleum and natural gas was up by 36.2 percent, that in production and supply of electricity, gas and water went up by 35.9 percent and 48 percent growth for railway construction.

5. Accelerated growth of consumption demand. In the first half of this year, the total retail sales of consumer goods reached 2,961.0 billion yuan, a year-on-year rise of 13.2 percent, or a real growth of 12 percent if price factors were deducted, it was 1.8 percentage points higher than that in the first half of 2004 (it was 493.5 billion yuan in June, up by 12.9 percent). Of the total, the retail sales in cities reached 1,988.2 billion yuan, up by 14.2 percent, and the sales at county and below county level stood at 972.7 billion yuan, up by 11.1 percent. Of the wholesale and retail trade enterprises above designated size, the year-on-year growth of the retail sales of communication facilities was 20.0 percent, that of petroleum and related products went up by 37.4 percent, and 9.7 percent growth for motor vehicles.

6. Moderate growth of market prices. The consumer price index in the first half of this year rose by 2.3 percent, lower than that in the same period of last year, which stood at 3.6 percent, representing the trend of moderate rise. The CPI rose by 1.9 percent in cities and 2.9 percent in rural areas. In terms of commodity categories, prices for food rose by 4.4 percent, housing price was up by 5.7 percent, and prices for recreation, education and culture articles and services rose by 2.7 percent. Prices for other categories of commodities either maintained the same level or had slight decline. Looking at the development of consumer prices, the growth rate slowed down steadily with its year-on-year growth rate standing at 1.8 percent, 1.8 percent and 1.6 percent in April, May and June (or declined by 0.3 percent, 0.2 percent and 0.8 percent respectively on month-to-month basis). The producer prices for industrial products grew by 5.6 percent year-on-year (it was 5.2 percent in June), the purchaser’s price for raw material, fuel and power rose by 9.9 percent (it was 9.0 percent in June) which still running at a high level.

7. High export and low import pattern for foreign trade. In the first half of this year, the total value of import and export was US$ 645.0 billion, up 23.2 percent, or 15.9 percentage points lower as compared with the same period of 2004. Of the total, export value was US$342.3 billion, up by 32.7 percent, or 3 percentage points lower, and import value was US$302.7 billion, up 14.0 percent, or 28.6 percentage points lower than that in the same period last year. The trade surplus was US$39.6 billion. The total contracted value for foreign direct investment in the first half of this year was US$86.2 billion, a year-on-year growth of 19.0 percent, and the actually utilized foreign capital was US$28.6 billion, a year-on-year decrease of 3.2 percent. By the end of June, China’s foreign exchange reserves reached US$711.0 billion, an increase of US$101.1 billion as compared with that at the beginning of this year.

8. Fairly rapid growth in the income of urban and rural households. In the first half of this year, the per capita disposable income of urban residents was 5,374 yuan, 9.5 percent year-on-year growth in real terms. The per capita cash income of rural residents was 1,586 yuan, a real growth of 12.5 percent year-on-year. The income growth was 0.8 and 1.6 percentage points higher over the same period last year.

The above statistics show that the national economy continued to develop in the expected direction of macro-regulation and control. The overall situation is good. The prominent problems of economic performance are: it is very difficult to increase farmers’ income; the total size of investment is too large and the structure is irrational; the economic efficiency of some industries is not as good as that in the previous year; and the supply of coal, electricity, oil and transportation capacity is tight. As for the following months of this year, so long as we continue to implement macroeconomic policies of the central government, vigorously promote reform of economic system, adjust economic structure and change the pattern of economic growth, the economic performance for the whole year will maintain its stable and rapid growth.