China's gross domestic product (GDP) soared by 11.5 percent in
the first half of the year, after posting 11.9 percent in the
second quarter, an official from the National Bureau of Statistics
(NBS) revealed this morning at a press conference.
The growth rate for the first half is 0.5 percentage points
higher than the same period last year and much faster than the
planned eight percent, spokesman Li Xiaochao with the National
Bureau of Statistics told?the press conference.
Consumption, the previously weakest engine compared with exports
and investment, was no longer tailing the pack as retail sales grew
15.4 percent in the first half, 2.1 percentage points more than
last year's rise in the first half. Fixed assets investment rose
25.9 percent, down 3.9 percentage points.
"The changes in domestic demand since the beginning of the year
are what we were expecting," Li said, attributing the faster
consumption to rising incomes among members of the public.
Chinese government has used every weapon at its disposal,
imposing a battery of industrial and taxation policies to help the
poor, including subsidizing low-income families and farmers,
increasing minimum wages for migrant rural workers and investing
more in education, medical care and housing.
"We are carefully monitoring the direction that the accelerated
economic growth is taking," said Li, "but whether or not the
economy has overheated is a comprehensive issue that should be
viewed from different angles."
In the first half, the primary, secondary and tertiary sectors
reported 947 billion, 5.55 trillion and 4.18 trillion yuan in added
value, with the secondary sector, including manufacturing, mining
and construction, growing at the fastest year-on-year rate of 13.6
percent.
The primary sector posted a growth rate of 4.0 percent and the
tertiary sector, including transport, telecommunications, catering,
tourism, banking and insurance, recorded an increase of 10.6
percent.
Food price rise driving CPI up
Price hikes on foodstuffs, principally grain, meat and fowl and
eggs, were to blame for the rise of China's consumer price index
(CPI) in the first half of this year, Li said.
The major inflation indicator rose 4.4 percent in June compared
with a year ago, or up 0.4 percent on the previous month.
This helped jack up CPI for the first half of this year by 3.2
percent on the same period of last year. The growth rate was 1.9
percentage points higher than the year-earlier level.
In breakdowns, foodstuff prices rose 7.6 percent, with grain
price up 6.4 percent, egg price up 27.9 percent and prices for meat
and fowl as well as related products up 20.7 percent. However,
prices of fresh vegetables and fruits went down 2.9 percent from a
year earlier.
Li Xiaochao noted foodstuff prices contributed 2.5 percentage
points to the CPI rise in the January-June period. He said
deducting prices of foodstuff and energy, China's core CPI rose
only 0.9 percent. Price hikes for foodstuff focused on grain, meat
and fowl and eggs, Li added.
According to Li, the grain price rise was due largely to the
rising grain prices on international markets and growing demand
both at home and abroad.
Under the price hike on international grain markets, he said,
China imported 800,000 tons of cereal in the first five months of
this year, down 51.5 percent from a year earlier, and exported 5.06
million tons, up 53.5 percent.
China built some biological fuel projects over the past few
years, which also gave rise to domestic demand for grain, Li
said.
Meanwhile, means of production for agricultural products
experienced a price rise of 5.2 percent in the first half of this
year, a rate 3.9 percentage points higher than the year-earlier
level, another contributing factor to the rise.
In terms of prices of meat and fowl, Li said, rises for pork
prices were the most noticeable, as they were driven up after price
hikes for animal food, transport fees and increasing pay for
workers as well as a short supply brought about by dwindling profit
margins.
Pig blue-ear disease outbreaks in 20-odd provinces and
autonomous regions also affected the supply, Li noted.
He added that there existed potential risks for CPI to go
further up in the second half of this year.
According to Zhuang Jian, a senior economist with the Asian
Development Bank's China office, low-income earners would be most
severely affected by continuous CPI rises at a high level. Zhuang
believed the central government would act decisively to maintain
economic and social stability.
According to NBS data, on year-on-year perspective, CPI was up
2.2 percent in January, up 2.7 percent in February, up 3.3 percent
in March, up 3.0 percent in April and up 3.4 percent in May. The
first quarter CPI stood at 2.7 percent.
In related developments, retail prices of commodities rose 2.4
percent in the first half of this year, or up 3.2 percent in June.
Meanwhile, factory prices for industrial products increased by 2.8
percent in the six-month period, or up 2.5 percent in June while
the buying prices of raw materials, fuel and power went up 3.8
percent in the same period, or up 3.4 percent in June.
(Xinhua News Agency July 19, 2007)
