Financial Times:

The just-released statistics show that the GDP growth rate in the first quarter stood at 7 percent. Could you generally explain the respective contributions made to economic growth by consumption, exports, and gross capital formation? Do you think the export growth from the first quarter will continue in the future?

Sheng Laiyun:

I'm sorry to say that I haven't got the final statistics on the contribution rates to economic growth by the three major types of demand. The calculation of our GDP is in accordance with production methods, and the calculation of demand involves statistics from more departments and more information, so I haven't got the final statistics on the contribution rates by the three major types of demand. However, generally speaking, domestic demand, mainly consumption demand, made the greatest contribution to economic growth, and this is most likely the situation. There was a new situation in the first quarter of this year. Due to changes in the price of imported and exported commodities, the trade surplus increased in the first quarter, and exports' contribution to economic growth increased compared with the same period last year. Gross capital formation's contribution to economic growth might have slightly declined, mainly because the fixed asset investment growth rate in the first quarter fell by 4 percentage points compared with the same period last year. Consumption was relatively stable, with the actual growth of total social consumer retail sales standing at 10.8 percent, basically equaling last year's figure, 10.9 percent. So consumption was the biggest contributor among the three major demands, which are known as the "three carriages" [stimulating economic growth]. Its contribution hit 60 percentin the first quarter of last year , and is estimated to be roughly the same this year. Of course, the final statistics are subject to final confirmation.

About the issue of export sustainablity: Due to changes in international situation, China's domestic factor cost and international and domestic structural adjustments, my general feeling is that China is faced with relatively large export pressure. On the one hand, the overall recovery of the international economic situation is comparatively slow, and trade growth and external demand are sluggish overall. On the other hand, the issue is closely related to domestic structural adjustment and cost changes. Some labor-intensive products are relatively weak in terms of competitiveness because of rising labor costs, so their comparative benefits are weakened. Some industrial sectors are likely faced with pressures from both re-industrialization in developed countries and low costs in developing countries. So the export pressure still exists. However, China still has competitive advantages in infrastructure, labor skill levels and other comprehensive aspects since it has a relatively good industrial base and Chinese enterprises are accelerating structural adjustment, transformation, upgrading and technological innovation.. If we strengthen structural adjustments and accelerate innovation, it is possible for China to maintain stable export growth.