Export growth down, FDI up

During the first half, the value of exports was 666.6 billion U.S. dollars, up 21.9 percent. The growth rate was 5.7 percentage points lower than the same period last year.

"Many export-oriented companies could face increasing pressures in the second half of this year due to uncertainties in the global economy," said Zhang Liqun, a macro-economist at the Development Research Center of the State Council, the Cabinet.

The country had a trade surplus of 99 billion U.S. dollars, a decrease of 13.2 billion U.S. dollars over the same period last year.

The total value of foreign direct investment (FDI) actually utilized was 52.4 billion U.S. dollars, up 45. 6 percent. The growth was 33.4 percentage points higher than a year earlier.

By the end of June, the foreign exchange reserves stood at 1,808.8 billion U.S. dollars, up by 35.7 percent.

Problems remain

Inflation was expected to slow in the second half, but China should remain vigilant against high inflationary pressure due to rising prices of commodities and oil on the global market, Yao said.

The bureau said in a statement that outstanding problems existing in economic performance included persisting pressure for rapid price rises, factors to constrain steady agricultural production and raise the income of rural residents, and the severe international financial situation.

"We must continue to curb inflation," the spokesman said.

He said many countries, both developed and developing, suffered rising inflation in the last two months. Globally, prices of primary products, such as oil and grain, had risen more than 30 percent. Energy prices continued rising in June with coal up 19.9 percent and oil 7.2 percent.

"With the further opening-up of Chinese economy, we are more vulnerable to international factors," Li said.

He also said the post-quake reconstruction would drive up demand on building materials, which could contribute to CPI rises.