(July 16, 2004)

National Bureau of Statistics, the People's Republic of China
Spokesman
Zheng Jingping

In the first half of this year, the macro-regulatory measures adopted by Chinese government achieved significant results. National economy kept stable and fast growth with further improved economic efficiency, rapid growth in foreign trade and notable rise in the residents' income. The uncertainties and unhealthy factors existing in economic performance have been put initially under control. The overall economy is moving toward the expected direction of macro regulation.

1. National economy kept fast growth. According to preliminary estimation, in the first half of this year, the gross domestic product reached 5,877.3 billion yuan, up 9.7% over the same period last year at comparable prices, or 0.9 percentage points higher. Of this total, the value-added of the primary industry was 617.7billion yuan, up 4.9%; that of the secondary industry was 3,382.2 billion yuan, up 11.5%; that of the tertiary industry was 1,877.4 billion yuan, up 8.0%. The GDP growth was 9.8% in the first quarter and 9.6% in the second quarter of this year with no significant fluctuations.

2. Agricultural production showed encouraging trend. After consecutive 5 year of declining, the planting areas for grain crops were expected to surpass 100 million hectares, up by 1% over the previous year. The planting areas for cotton were up by 10.6%, and that of oil-bearing crops, up by 0.7%. The planting areas for sugar would be decreased by 5.4%. Good harvest was seen in summer grain, and the total output was expected to reach 101.05 million tons, up 4.8%.

3. Industrial production kept steady and rapid growth. In the first half of this year, the value added of industrial enterprises was 2,982.2 billion yuan, up by 11.9% over the same period last year. Of this total, the value added of industrial enterprises above the designated size was 2,468.2 billion yuan, up 17.7%, or 1.5 percentage points higher. In terms of heavy and light industries, the growth of the heavy industry was 19.7%, and that of the light industry was 15.6%. In terms of different products, the growth of steel and rolled steel was up 21.1% and 23.2% respectively, or 5.3 and 6.3 percentage points lower as compared with that in the first quarter of this year. Rapid growth was seen in energy production, the growth of coal and electricity generation was up 14.9% and 15.8% respectively. In the first half of this year, the sales ratio of industrial products reached 97.2%, up 0.2 percentage points over the same period last year.

4. The growth rate of investment in fixed assets slowed down gradually. In the first half of this year, the total investment in fixed assets was 2,608.2 billion yuan, up 28.6% over the same period last year, it was 2.5 percentage points lower over the same period last year, or 14.4 percentage points lower as compared with that in the first quarter of this year. Of the total investment, the urban investment in fixed assets was 2,184.4 billion yuan, up 31.0%, or down by 16.8 percentage points as compared with that in the first quarter. The complete investment in real estate sector was 492.4 billion yuan, up by 28.7%, or down by 12.4 percentage points as compared with that in the first quarter of this year.

5. Sales on domestic market were stable with a brisk trend. In the first half of this year, the total retail sales of consumer goods amounted to 2,524.9 billion yuan, up 12.8% over the same period last year, and the real growth was 10.2% after deducting price factors. Momentum of fast growth was kept in the sales of some key consumer products. The retail sales of telecommunication equipment by wholesale and retail outlets above designated size went up by 52.3% over the same period last year, the sales of petroleum and petroleum products was up 44.3%, of motor vehicles, up 43.7%, of household electric appliances and audio and video equipment, up 18.1%, of articles for sports and entertainment, up 21.5%, and of furniture, 20.6%.

6. The rise of market prices was manageable with its trend weakened to some extent. In the first half of this year, the CPI was up 3.6% over the same period last year. Of the total, the CPI in cities was up by 3%, that in rural areas, 4.6%. In terms of month on month changes, it was down by 0.1% in May, and was further down by 0.7% in June. In terms of different categories, in the first half of this year, price for food was up by 9.5%, price for medical care and articles for personal use increased by 0.3%, that for recreational, educational articles and services went up by 0.9%. Price for housing was up by 3.7%. However, prices for clothing, household apparatus and services, means of communication and transportation were down by 1.4%, 1.6% and 1.7% respectively. In the first half of this year, the RPI was up 2.4%. The ex-factory price for industrial products was upby 4.7%, and the purchasing prices for raw materials, fuels and power went up by 9.8%.

7. Imports and exports kept fast growth, utilization of foreign capitals continued to increase. In the first half of this year, the total volume of imports and exports was 523.0 billion US dollars, up 39.1% over the same period last year. The total exports was 258.1 billion US dollars, up 35.7%, and the total imports was 264.9 billion US dollars, up 42.6%, with a trade deficit of 6.8 billion US dollars. In the first half of this year, the contracted volume of foreign direct investment reached 72.7 billion US dollars, an increase of 42.7% over the same period last year; the actually utilized foreign investment was 33.9 billion US dollars, up 12.0%. By the end of June, foreign exchange reserves of China reached 470.6 billion US dollars, an increase of 67.3 billion US dollars as compared with that at the beginning of this year.

8. The growth of income of urban and rural residents accelerated. In the first half of this year, the per capita disposable income of urban residents was 4,815 yuan, up 11.9%, the real growth was 8.7% after deducting price factors, 0.3 percentage points higher over the same period last year. The per capita cash income of rural residents was 1,345 yuan, up 16.1%, or a real growth of 10.9%, or 8.4 percentage points higher over the same period last year, representing the highest increase since 1997.

All these illustrate that the overall performance of national economy is good, which paved the way for sustained, stable and rapid economic growth in the following period. However, we should be aware at the same time that those prominent problems exiting in national economy have not been rooted out fundamentally. The bottleneck of energy and transportation is still prominent, the growth rate of investment in fixed assets in certain sectors is still high, the growth rate of purchasing prices for raw materials, fuels and power and prices for investment are fairly high and the structure of loans is not rational. In the second half of 2004, efforts should continue in further implementing and improving various policies for macroeconomic regulation. While further consolidating the achievements and guarding against the reversal, focus should be put on adjusting structure, deepening reforms and changing the pattern of economic growth to ensure the stable, fast and coordinated economic development.