The Chinese Government will focus on five specific sectors to
maintain economic growth, a senior official said Thursday.
The sectors are housing, cars, information technology,
healthcare and education, which have increasingly made up the
lion's share of Chinese people's consumption.
Zheng Xinli, deputy director of the Policy Research Centre
affiliated to the Central Committee of the Communist Party of
China, told an international seminar on real estate and
construction held in Beijing Thursday: "Based on China's current
economic development pattern, we have decided the guiding
policy.''
China's gross domestic product (GDP) increased 8.2 percent year
on year in the first half of this year, overcoming the shadow of
SARS (severe acute respiratory syndrome) that plagued the economy
in the spring.
Fixed-asset investment in the first half of this year soared
31.1 percent year on year. The balance of bank loans increased by
22.9 percent, the highest growth rate since 1996.
However, consumption grew by just 9 percent compared with the
same period of last year.
"The growth imbalance is likely to expand the continuous
oversupply of some products on the market,'' said Zheng.
Official statistics indicate that about 85 percent of 500
everyday commodities on the Chinese market are oversupplied and no
commodity falls short of demand.
Urgent measures needed to tap the potential of domestic
consumption are to fatten the wallets of farmers and create more
jobs, said Zheng.
"Decreases in farmers' income and unemployment in cities are two
urgent problems facing the government,'' he said.
Last Saturday, the State Council urged local governments to do
more to increase farmers' income and help them survive the fallout
from the outbreak of SARS as well as other natural disasters.
A nationwide survey by the National Bureau of Statistics showed
that farmers' per capita cash income grew by a meager 3.2 percent
year on year in the first half of this year, down 3.4 percentage
points on an inflation-adjusted basis. Meanwhile, the per capita
disposable income of city dwellers increased by 9 percent to 4,301
yuan (US$520).
Worse, in the second quarter when the SARS epidemic peaked,
rural people actually earned on average only 421 yuan (US$50.90) in
cash, 11 yuan (US$1.30) less than during the same period the
previous year. The contraction of farmers' cash income could foil
the government's efforts to narrow the already huge gap between
urban and rural areas.
Non-agricultural income has become a major source of growth in
farmers' income in recent years. But the SARS outbreak deprived
many rural migrant workers of their jobs in the cities during the
second quarter.
Mindful of this problem, the government reiterated the
importance of creating non-farming job opportunities for rural
migrants in late June, when the country was bringing the SARS
epidemic under control.
In the cities, the registered jobless rate climbed to 4.2
percent, 0.2 percentage points higher than the rate at the end of
last year.
To tackle the problem, the State Council has planned a
high-level national conference scheduled to be held today in a bid
to create more jobs.
Data from the Macroeconomics Research Institute under the
National Development and Reform Commission show that China's GDP is
expected to reach 1.1 trillion yuan (US$144 billion) this year, for
an estimated growth rate of just over 8 percent.
Chen Dongqi, the institute's vice-president, said: "China has
returned to the fast track of economic development.''
He said he believed that China's new round of economic growth
would not be held back by the effects of the SARS outbreak in April
and May or the droughts and floods that have affected many regions
of the country this summer.
He forecast that China's economy will increase by 7.5 percent
year on year in the third quarter of this year and by 8 percent in
the fourth quarter.
In the first quarter, the country's economy rose by 9.9 percent
year on year, which was the highest growth rate since 1997. But the
growth rate fell to 6.5 percent during the second quarter due to
SARS.
(China Daily August 15, 2003)
