e-magazine
The Hot Zone
China's newly announced air defense identification zone over the East China Sea aims to shore up national security
Current Issue
· Table of Contents
· Editor's Desk
· Previous Issues
· Subscribe to Mag
Subscribe Now >>
Expert's View
World
Nation
Business
Finance
Market Watch
Legal-Ease
North American Report
Forum
Government Documents
Expat's Eye
Health
Science/Technology
Lifestyle
Books
Movies
Backgrounders
Special
Photo Gallery
Blogs
Reader's Service
Learning with
'Beijing Review'
E-mail us
RSS Feeds
PDF Edition
Web-magazine
Reader's Letters
Make Beijing Review your homepage
Hot Links

cheap eyeglasses
Market Avenue
eBeijing

Previous
Cover Story Series> Previous
UPDATED: August 2, 2010 NO. 31 AUGUST 5, 2010
Slower But Healthier Growth
China maintains high GDP growth, low unemployment rate and low inflation against the backdrop of a fragile global economic recovery
LAN XINZHEN
Share

Enterprises picked up in performance, too. Large state-owned and non-public enterprises in the industrial sector attained 1.54 trillion yuan ($226.5 billion) in profits, up 81.6 percent year on year for the January-May period, he said. The performance of small and medium-sized enterprises has improved too, thanks to supportive policies introduced last year by the Central Government.

Progress was also made in optimizing the structure of industrial investments and upgrading technologies in enterprises, he said. Fixed-asset investments in the industrial sector rose 22 percent in the fist six months, down 6.7 percentage points year on year. Efforts to curb blind expansion in certain industries took effect, too. Investment growth in six energy-depleting industries declined from last year's 25.6 percent to 16.3 percent. The 4,441 centrally subsidized projects of technological upgrading have all kicked off, with 662 of them beginning production.

Domestic demand

"China's economic growth in the first half was mainly driven by domestic demand," said Wang Yiming, Vice President of the Academy of Macroeconomic Research under the National Development and Reform Commission.

NBS statistics said domestic demand contributed to 42 percent of China's economic growth, while net exports, which used to see high reliance, contributed to 5.8 percent and 9.9 percent of GDP growth, respectively, in the second quarter and the first quarter.

Domestic demand stimulated industrial growth, Zhu said. Domestic market-oriented industrial output jumped 34.9 percent year on year, accounting for 86.9 percent of the total output. It was 0.6 percentage point higher than the same period last year, and 3.4 and 5.2 percentage points higher, respectively, than in 2008 and 2007.

Measures to boost sales of home appliances and cars and to subsidize old-for-new purchases have paid off, Zhu said. A total of 32.52 million sets of home appliances were sold in the first half of 2010, almost equal to that sold in all of 2009, and auto output and sales went up 48.8 percent and 47.7 percent, respectively, compared with the same period last year, he said.

Retail sales grew robustly in the first half of 2010, driven by an increase in average income and continued consumption incentives, especially in low-end retailing, said a report compiled by CCB International (Holdings) Ltd., a wholly owned subsidiary of the China Construction Bank.

Domestic demand will continue to be the main growth momentum in the second half, the report said.

Difficulties

But difficulties remained for the Chinese economy in the first six months of 2010, due to sovereign credit woes in Europe and problems with China's economic growth pattern.

The economic growth slowed from 11.9 percent in the first quarter to 10.3 percent in the second, down 1.6 percentage points. This has raised concerns of another round of decline for China's economic growth.

The decrease was largely because of the accelerating growth rates during the same period last year—in 2009, GDP growth jumped from 6.5 percent in the first quarter to 8.1 percent in the second quarter—as well as policies aimed to cool off excessive investments and speculations, Sheng said.

Despite the drop, the Chinese economy is still on track, because the second-quarter growth was basically consistent with the average rate between 2000 and 2009.

Sheng said China would maintain stability and continuity in macroeconomic policies, but increase flexibility, focus and predictability in accordance with complicated external conditions.

It was not necessary to worry about the slowdown of economic growth, and another round of decline is unlikely for the Chinese economy, he said.

And fluctuating raw material prices and growing labor costs posed additional challenges to the Chinese economy, Zhu said. Labor costs in the Yangtze River and Pearl River deltas, China's two manufacturing powerhouses, increased 20 to 25 percent in the first half.

Also, small companies are facing increasing difficulties in securing loans. Export-oriented companies in processing industries, labor-intensive companies in particular, are sensitive to changes in macroeconomic policies and hesitate to ink both large and long-term contracts.

   Previous   1   2  



 
Top Story
-Protecting Ocean Rights
-Partners in Defense
-Fighting HIV+'s Stigma
-HIV: Privacy VS. Protection
-Setting the Tone
Most Popular
 
About BEIJINGREVIEW | About beijingreview.com | Rss Feeds | Contact us | Advertising | Subscribe & Service | Make Beijing Review your homepage
Copyright Beijing Review All right reserved