China's economy will be able to maintain an eight percent growth rate in the latter half of the year benefiting from favorable domestic and international factors, according to the State Information Center.
The end of the Iraqi war has gradually restored the confidence of both world investors and consumers, making it possible for the world economy to recover after two years of wavering, the center said in a report carried by the <i>Economic Daily</i>.
The report said this would help improve the international climate for China's economic development, though the benefits would be limited.
Domestically, the growth of pillar industries driven by increasing consumption and high investment input have helped to lay a solid foundation for economic progress in the latter half of the year and into next year.
On the whole, the report forecasted four development tendencies for China's economy in the latter half of the year.
First, domestic consumption will experience a smooth recovery following the attack of the Severe Acute Respiratory Syndrome (SARS), though the annual growth rate is expected to be lower than last year.
The SARS epidemic has slowed income growth of both urban and rural residents, which is disadvantageous to consumption. Meanwhile, advance spending on automobiles and telecommunications facilities in the epidemic period would bring down overall consumption figures for the second half of the year.
It is predicted that the entire retail sales volume will amount to 3.84 trillion yuan (US$463 billion) by year end, up 8.1 percent year-on-year, which is 0.7 percentage points lower than the growth rate of 2002.
Second, investment input is expected to drop slightly in the second half of the year though the annual investment growth rate is predicted to be higher than last year's.
It is predicted that the annual investment input will grow a considerable 23 percent, up 5.5 percentage points over last year.
Third, exports growth is expected to slow down in the second half of the year and the annual increase rate will be lower than last year.
A 20 percent growth in exports this year has been predicted, a drop of two percentage points on last year.
Imports this year, however, are expected to rise 27 percent, 6 percentage points more than in the previous 12 months, cutting the trade surplus by 50 percent to 15 billion dollars.
Fourth, electric power production would sustain China's industry to fulfill a growth rate ranging between 11 percent to 13 percent and industrial growth in the second half is estimated at around 13.5 percent year-on-year.
(People's Daily September 4, 2003)
