China’s economy has maintained its rapid growth during last five
months owing to effective macro-control measures by the central
government, said Cao Yushu, spokesman, deputy secretary-general and
director general of the Office of Policy Studies of National
Development and Reform Commission, at a press conference
yesterday.
In the first five months of this year, industrial added value
increased 18.1 percent. Fiscal revenue shot up 32.4 percent to 1.2
trillion yuan (US$145.0 billion), a year-on-year increase of 293.3
billion yuan (US$35.4 billion).
The government tightened credit controls and the growth rate of
credit supply shrunk as a result. The People’s Bank of China, the
country’s central bank, pulled back the reins on commercial banks
whose lending had increased substantially, with a view to
curtailing their capacity to grant credit. It also controlled
credit supply to overheating sectors such as steel, while meeting
capital demand for projects that are conducive to structural
readjustment, consumption expansion and job creation.
The country restored order to land markets, especially in
development zones, by more strictly regulating land utilization.
Efforts have been made to examine and dispose of projects under
construction or to be constructed, while criteria for approval of
new projects have been raised.
The central government improved coordination of coal and oil
supply, power generation and transportation capacity.
China promulgated a series of policies to encourage grain
production, such as direct subsidies to farmers, subsidies on fine
seeds and reduction or abolition of the agricultural tax. Recently,
the State Council approved the reform plan for the grain marketing
system and convened a national meeting to deploy an
across-the-board grain reform.
The measures have reined
in investment growth. From January to May, total urban fixed asset
investment amounted to 1.5 trillion yuan (US$186.0 billion), up
34.8 percent over the same period last year. But compared with the
preceding four months, investment growth rates in steel,
non-ferrous metals and cement dropped 22.5, 9.7 and 23.7 percentage
points, respectively; and real estate investment was down 2.6
percentage points.
May grain prices edged
down 0.5 percent from the previous month, the first drop since last
August.
An increase in the yield
of summer grain crops is foreseeable. According to the forecast by
the Ministry of Agriculture, the wheat yield will gain about 2.5
billion kilograms, reversing four consecutive years of decline. The
total yield of summer grain crops is expected to be approximately
100 billion kilograms. By the end of May, the total acreage given
to spring sowing reached 776 million mu (51.7 million
hectares), a year-on-year increase of 30 million mu (2
million hectares).
In May, the total
industrial added value of enterprises above the statistical
tolerance minimum grew 17.5 percent over the previous month. The
growth rate of output fell significantly in overheating sectors. In
the meantime, coal output, power generation and transportation
capacity have maintained steady growth.
May retail sales climbed
17.8 percent year-on-year. In the January-May period, total retail
sales grew 12.5 percent year-on-year. Sales of commercial housing
advanced 44.9 percent and automobiles rose 53.2 percent.
Total foreign trade in
May climbed 34.1 percent, to US$87.6 billion, with exports growing
32.8 percent to US$44. 9 billion and imports reaching US$42.8
billion, up 35.4 percent. The year’s first trade surplus amounted
to US$2.1 billion. Contractual foreign direct investment was
US$57.2 billion and actual FDI reached US$25.9 billion, growing
49.8 percent and 11.3 percent, respectively, from the previous
year.
Cao Yushu also pointed out that challenges and problems still
exist. These include a relatively high rate of investment growth
and improper investment mix as well as an improper loan mix. The
precarious supply and demand relationship between coal, power, oil
and transportation and potential imbalance in grain supply and
demand could put upward pressure on prices.
(China.org.cn by Guo Xiaohong June 24, 2004)