National economic growth continued at a rapid pace. The year's gross domestic product (GDP) was 11,669.4 billion yuan (US$1,405.95 billion), an increase of 9.1 percent, or 1.1 percentage points more than the previous year at comparable prices. The value-added of the primary industry was 1,724.7 billion yuan (US$207.80 billion), an increase of 2.5 percent; this was 0.4 percentage points lower. The value-added of secondary industry was 6,177.8 billion yuan (US$744.31 billion), an increase of 12.5 percent, or 2.7 percentage points higher. The value-added of tertiary industry was 3,766.9 billion yuan (US$453.84 billion), up by 6.7 percent, or 0.8 percentage points lower. In tertiary industries, the financial and insurance industry grew by 6.9 percent, wholesale and retail sales and the catering industry grew by 6.6 percent, and the real estate industry grew by 5.3 percent.

The general price level increased by a small margin. The general level of consumer prices in China in 2003 increased by 1.2 percent compared to the previous year. Of this total, consumer price levels in urban areas increased by 0.9 percent, and increased by 1.6 percent in rural areas. Food prices increased by 3.4 percent and service item prices were up by 2.2 percent. Commodity retail prices were down by 0.1 percent, while producers' prices for manufactured goods increased by 2.3 percent, and purchasing prices for raw materials, fuels and power went up by 4.8 percent. Prices for investment in fixed assets were up 2.2 percent. Producers' prices of farm products were up by 4.4 percent. Analyzed by products, cereal prices were up 2.3 percent, cotton was up 35.3 percent, oil-bearing crops were up 19.4 percent and livestock products increased by 1.8 percent.

Table 1: Change in Consumer Prices in 2003 over 2002 (%)

Employment continued to expand in 2003. The total number of employed people in China was 744.32 million by the end of the year, or 6.92 million more than at the end of 2002. Of this total, 256.39 million were employed in urban areas, an increase of 8.59 million persons compared to the end of 2002. In 2003, 4.40 million workers laid off from State-owned enterprises were re-employed. The urban unemployment rate through unemployment registration was 4.3 percent at the end of 2003, an increase of 0.3 percentage points.

China's balance of payments were in a good position. The trade surplus was US$25.5 billion in 2003, a decrease of US$4.9 billion. The utilization of foreign capital continued to increase. Foreign exchange reserves increased by a large margin. China's foreign exchange reserves reached US$403.3 billion by the end of 2003, an increase of US$116.8 billion compared with the end of the previous year. The RMB exchange rate remained stable.

Main problems that existed in the economic and social development included: the slow growth of fa rmers' incomes; the heavy tasks for employment and social security; the tight relationship between energy and transportation supply and demand, the large investment in fixed assets, the blind investment and repeated low quality expansion in some industries; the big income gap between certain groups of population, the relatively difficult life of low-income households, and increasing resource and environmental pressures.

(China.org.cn March 1, 2004)