China's economy kept growing in the
first half of the year. However, imbalanced investment structure as
well as inadequate consumption has threatened rapid and healthy
development.
Investment rises
sharply
Investment in the first six months
of the year rose sharply. Latest statistics show that fixed-asset
investment from January to May reached 1,057.8 billion yuan
(US$127.8 billion), up 31.7 percent over the same period last year,
the highest growth since 1994.
Experts say that China's investment
ratio is a little high. On the other hand, inadequate consumption
has become an important factor that slows down national economic
growth.
The sharp rise of investment is
believed to be caused by several factors. First, China's economy
has entered a new economic expansion period. Second, enlarged
household spending has offered more areas of investment. With the
steady growth in household income and the promulgation of other
economic stimulating policies, the new consumption hotspots like
housing, vehicles, telecoms and entertainment have driven up
relevant investment.
Investment
structure
The inconsistency of investment
structure has appeared gradually: industrial investment continued
its rapid growth, while investment in the primary industry and
service sector increased only slightly.
In the first five months, investment
in the primary industry increased only 12.4 percent, 17.6 percent
less than that of last year. The ratio of agricultural investment
in total investments dropped from 3.4 percent last year to 2.9
percent this May. At the same time, fixed-asset investment in the
service sector rose 25.8 percent, 2.9 percent less over the same
period last year. Its ratio lowered from 65.7 percent to 61.4
percent. Investment in industries like retailing, restaurants,
storage and real estate, which were hit hard by SARS epidemic, fell
obviously.
Meanwhile, investment in traditional
industries has experienced explosive growth. In the first five
months, its investment rose 52.7 percent, 27.5 percent higher over
the same period last year.
Consumption
Latest statistics from the central
People's Bank of China show that saving deposits have reached 9.8
trillion yuan (US$1.18 trillion). Among them, accumulated amounts
in the first six months hit 1.1 trillion yuan (US$132.9 billion),
rising 19.5 percent over the same period last year.
In the first quarter, although
fixed-assets investment kept strong growth, consumption had
increased only by 9.2 percent. Influenced by the SARS epidemic,
retail sales in April and May rose only 7.7 percent and 4.3 percent
respectively, while fixed-assets investment rose 28.9 percent and
34.5 percent during that period.
Experts warn of a deflation crisis
once production might exceed demand following continuous growth of
investment.
(China.org.cn by Tang Fuchun, July
21, 2003)