Qiu Xiaohua, deputy director of the National Bureau of
Statistics, said Saturday that six problems are hindering China's
economic growth.
He said at a forum on enterprise management that these problems
are weak consumption, the lagging service industry, high pressure
on employment, difficulty in raising farmers' incomes, rapid
increase in the amount of loans and wasteful duplication of
construction.
Qiu noted that China's economy is still on the fast track, and
the impact of the outbreak of SARS is temporary.
The target of a seven-percent economic growth set for this year
is "very possible" to achieve, said Qiu, adding that it may even
reach eight percent.
Analyzing this year's economic development, Qiu said that demand
and investment had played a more prominent role in the economy, and
the manufacturing industry is its major driving force.
However, Qiu admitted that problems have been exposed in the
current course of economic development.
Qiu noted that worldwide, on average, 70 percent of economic
growth comes from consumption, while investment contributes only
some 20 percent. In China, investment contribution has been 13
percentage points higher than world's average, while that of
consumption is 17 to 18 percentage points lower than the world's
average in recent years. The gap is even bigger in this year's
economic development, he noted.
Statistics show that in the first half of this year 70 percent
of economic growth came from investment.
According to Qiu, the weak service industry might raise the
pressure on employment, which is already in a strained state. In
2003, China's newly added labor force will reach 10 million,
including 2.12 million college graduates.
By the end of June this year, the registered unemployed
population had reached nearly eight million, or 4.2 percent of the
total population. In the meantime, the outbreak of SARS threw
nearly seven million rural people out of work.
The SARS outbreak also reduced the income of
farmer-turned-workers, and depressed the demand for farm produce,
thus affecting the income of rural people. Statistics show that in
the second quarter of this year the per capita cash income for
farmers decreased by 35 yuan (US$4.23) over the same period. In the
first half of this year, farmers' per capita income increased by
only 3.2 percent over the same period last year, or 2.6 percent
after deduction of inflation.
Qiu also warned about the trend of a rapid increase in the total
size of loans, which stood at 1.76 trillion yuan (US$212.9 billion)
in the first half of this year. This figure equals the total amount
of newly increased loans for last year.
The trend of wasteful duplication of construction has also
damaged China's economy, said Qiu, citing the iron-and-steel and
textile industries as the worst offenders. Duplication of
construction brings exorbitant competition, reduces profits and
increases banks' financial risks, Qiu warned.
(Xinhua News Agency August 23, 2003)