Beijing Review, November 16-22, 1998

Production and Investment Picking Up

China's economy grew 7.2 percent in the first three quarters of the year at constant prices, with GDP hitting 5,443.5 billion yuan, according to Ye Zhen spokesman of the State Statistics Bureau.
Production and investment picked up noticeably and overall economic operation went on normally. With the State increasing investment in capital construction and disaster areas speeding up reconstruction, the economy in the last quarter will witness a faster growth, so that the goal of 8 percent economic growth for the year is achievable, he said.

According to the spokesman, economic operation in the first nine months showed the following features:

Agricultural production was stable, with autumn crops doing well. Due to natural disasters, the output of summer crops and early rice was reduced 19.9 billion kg. and the yield of autumn crops in some afflicted areas will also fall. But on the whole, autumn crops are doing well, promising a good harvest. Animal husbandry and fishery sectors will maintain stable growth, though cotton production will decline slightly.

Industrial production grew, and the production/sales situation improved. The industrial added value rose 8 percent overall to l,439.2 billion yuan, with the figure in the third quarter rising 8.6 percent, 0.7 point higher than the first six months. The increase in September was 10.2 percent.

The State and State-holding industrial sectors registered a rise of 4.1 percent, the collective sector 8 percent, and sectors with other types of ownership 12.5 percent. The sales rate of industrial products nationwide amounted to 97.64 percent in August and 97.84 percent in September, reaching a normal level.

Investment in fixed assets increased rapidly, becoming an essential element promoting economic pick-up. In the third quarter, the State-owned sector accomplished investment of 503.6 billion yuan, up 28.2 percent over last year's same period and 14.4 points higher than the growth in the first half of the year.

Between January and September, the investment in fixed assets by the State-owned sector reached 1,086.4 billion yuan, a rise of 20 percent compared with the same period of last year. Most investment went to basic industries and high-tech sector. The investment in agriculture, forestry, animal husbandry, fishery and water conservancy grew 29.8 percent, and that in transportation, posts and telecommunications 49.9 percent. Investment in western regions rose 33.7 percent, 15.7 points higher than eastern areas and 20.2 points more than in central parts.

Domestic sales rose gradually. Consumer goods retail sales reached 2,083.3 billion yuan, a rise of 6.3 percent over last year's same period, with the figure in the third quarter up 7 percent, 1 point higher than the first six months.

Faster increases were seen in the sales of food clothing and medicine needed by flood-stricken areas, heatstroke preventive goods, such as air conditioners, refrigerators and beverages, and housing decorative and finishing materials.

Foreign trade developed steadily, with introduction of foreign capital maintaining a favorable trend. The volume of imports and exports totaled US$232.9 billion, up 2.4 percent over last year’s same period and showing a favorable balance of US$35.3 billion.

To offset the influence of the Asian financial crisis, foreign trade departments did their best to expand exports. Compared with last year, exports to EU nations were up 21.7 percent in the first nine months, to Canada 10.4 percent, and to the United States 16.5 percent. Foreign direct investment totaled US$31.4 billion,  equaling last’s year level.

Market prices fell continuously. Retail prices were down 2.5 percent compared with last year, and consumer prices 0.7 percent.

The income of urban and rural residents went up continuously. The per-capita disposable income of urban residents reached 4,063 yuan, an actual rise of 6 percent allowing for price factors, and per-capita cash income of rural residents amounted to 1,427 yuan, an actual rise of 1 percent.

The spokesman also pointed out the main problems in the current economic operations. They featured contradictions caused by irrational structure, poor economic efficiency of State enterprises and a slump in the consumer goods market.
by LiNing

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