China's economy has maintained steady and rapid growth in the first half but faces increasing uncertainty for the rest of the year, a senior government official said Wednesday.

"Negative impact on the economy will continue," said Zhu Zhixin, vice-minister of the National Development and Reform Commission (NDRC), China's top economic planner, in a press conference.

The economy expanded 10.4 percent year-on-year in the first half, NDRC figures showed. The growth rate was 1.8 percentage points lower than the same period a year ago, as the government reportedly put in place a series of measures to cool the economy and weakening overseas demand dealt a blow to the export sector.

More than 7.56 million jobs were created in the first seven months, in line with government measures to create 10 million vacancies this year, the NDRC reported.

Still, Zhu said curbing price hikes in the second half of the year will be a difficult task. He added that the cost of primary goods and labor has continued to rise in recent months.

China's consumer inflation gained 7.7 percent year-on-year in the first seven months, as food and oil prices rose to record highs during the period. Although consumer inflation eased to 6.3 percent in July, it was still far short of the government's aim to bring annual inflation within 4.8 percent this year.

The government will maintain "a proper scale" of investment in the second half in a bid to continue the economy's stable growth, Zhu said.

Similarly, the authorities will take measures to enhance the contribution of domestic consumption to economic growth.

In the agriculture sector, the central government paid 102.9 billion yuan ($15 billion) in subsidies in the first half. The amount was twice what it had earmarked for the sector in the same period a year ago, the NDRC reported.

As a result, China's grain production amounted to 120.4 million tons, a record high. The authorities also managed to restore pork and vegetable production, despite natural disasters such as snowstorms and earthquake hitting the economy hard, Zhu said.

However, analysts have said that the outlook for the sector is uncertain with extreme weather posing a challenge.

Rising prices of fuel and fertilizer have also eaten into the profits of farmers, which may serve to discourage increases in production in the second half, Zhu said. He added that the government will continue to support the agriculture sector.

(China Daily?August 28, 2008)