Nation's Economy Maintains Steady and Rapid Growth in the First Three Quarters

October 20, 2005

Zheng Jingping

In the first three quarters, all regions and departments upheld the scientific approach of development in implementing in real earnest various policies set by the CPC Central Committee and the State Council, with aim to consolidate and expand the achievements of macro-regulation and advance vigorously the reform and opening-up programme. The nation s economy saw a good momentum of steady and rapid growth.

I.The nation s economy registered steady and rapid growth.

Preliminary estimates show that, the gross domestic product (GDP) totaled 10627.5 billion yuan, a year-on-year rise of 9.4 per cent, or 0.1 percentage point decline from the growth of a year earlier. Of this total, the primary industry registered a value-added of 1351 billion yuan, up 5.0 per cent. The value-added of secondary industry totaled 6044 billion yuan, up 11.1 per cent, and that of the tertiary industry rose 8.1 per cent to 3232.5 billion yuan. The economy showed a steady growth momentum with GDP growth rates standing at 9.4 per cent, 9.5 per cent and 9.4 per cent for the first, second and third quarter respectively.

II.Conditions favoured agricultural production.

Various preferential policies supporting agriculture and farmers effectively aroused farmers enthusiasm for planting, which results in good development in agriculture and rural areas. The production of summer grain reached 106.3 million tons, up 5.1 per cent from a year earlier. The production of early rice dropped 1.3 per cent to 31.8 million tons. With the sown areas expanded, the output of autumn crops such as late rice and corn is expected to increase. 2005 will be another bumper year of grain. Good momentum was also found in animal husbandry and fishery as the production of pork, beef, mutton and poultry in the first nine months rose 6.7 per cent and that of aquatic products was up 3.9 per cent from a year earlier.

III.Industrial production grew steadily.

Industrial value-added by enterprises above designated size totaled 5045 billion yuan in the first nine months, a year-on-year rise of 16.3 per cent (September alone came to 627.5 billion yuan, up 16.5 per cent). Of this total, the value-added rose 11.3 per cent in state-owned or state-controlled enterprises, 11.9 per cent in collective-owned enterprises, 17.9 percent in shareholding enterprises and 16.2 per cent in foreign enterprises and those funded by Hong Kong, Macao and Taiwan. The value-added in heavy industry and light industry rose 16.9 per cent and 14.9 per cent respectively. Output of coal, electricity and steel products rose 10.2 per cent, 13.4 per cent, and 25.8 per cent from a year earlier. The output of motor vehicles increased 10.0 per cent, of which, that of sedans was up 17.7 per cent. The sales and production were well linked in the first nine months with the sales ratio in enterprises above designated size standing at 97.86 per cent, the same level as that of a year earlier.

IV.Growth of Investment in fixed assets remained high.

The total investment in fixed assets was 5706.1 billion yuan in the first nine months, up 26.1 per cent year-on-year, representing a 1.6 percentage points decline compared with the growth of a year earlier. Investment in fixed assets in urban areas was 4874.1 billion yuan, up 27.7 per cent, or 2.2 percentage points drop from that of a year earlier (September alone registered 759.1 billion yuan, up 29.4 per cent). Of the total urban investments, real estate development rose 22.2 per cent to 1037.8 billion yuan (it was 145.8 billion yuan in September, up 21.9 per cent). Its growth was 6.1 percentage points lower than that of the previous year. Investment in coal and oil production and in railway transport maintained rapid growth in the same period. Investment registered a 76.8 per cent surge in coal extraction and dressing from a year earlier. It climbed 31.3 percent in oil and natural gas extraction, and 41.1 per cent in railway transport.

V.Market sales increased gradually.

The total retail sales of consumer goods in the first nine months was 4508.1 billion yuan, a year-on-year rise of 13.0 per cent (September came to 549.5 billion yuan, up 12.7 percent), or a growth of 12.1 per cent in real terms. The real growth was 2.4 percentage points higher than that of a year earlier. The retail sales rose 14.0 per cent to 3030.9 billion yuan in urban areas, and 11.0 per cent to 1477.2 billion yuan in regions at and below county level, reflecting a 13.4 per cent and 9.4 per cent growth in real terms respectively, or 1.3 and 4.2 percentage points higher than the growth of a year earlier. Of the sales by wholesale and retail business above designated size, communication equipments rose 20.1 percent, oil and oil products up 38.3 per cent and automobiles up 13.1 per cent.

VI.Price rise slowed.

Consumer prices in the first nine months had a year-on-year rise of 2.0 per cent (it was up 0.9 per cent in September), or a decline of 2.1 percentage points compared with a year earlier. Prices maintained a moderately upward trend with 1.7 per cent rise in cities and 2.5 per cent rise in rural areas. In terms of categories of commodities, slowed increase in food prices, particularly in grain price was the main reason for a decline in the rise of consumer price index. In the first three quarters, food prices rose 3.3 per cent, or 7.6 percentage points slower than that of a year earlier. Grain prices rose 1.9 per cent, a drop of 26.5 percentage points. Housing prices climbed 5.6 per cent, or 1.2 percentage points higher than that of a year earlier. Prices for recreation, education, culture goods and services rose 2.6 percent. Prices for other goods either maintained the same level or saw a slight decline. Retail sale prices rose 0.8 per cent year-on-year in the first three quarters. In September, it equaled that of the same month a year earlier. Producer s prices of manufactured goods increased 5.4 per cent and purchasing prices of raw material, fuel and power were up 9.2 per cent. In September, the two price indices rose 4.5 and 7.1 per cent respectively.

VII.Foreign trade maintained rapid growth.

The total volume of foreign trade in the first nine months reached US$ 1024.5 billion, a year-on-year rise of 23.7 per cent, or 0.5 percentage point faster than that of the first six months and 13.0 percentage points decline from that of a year earlier. Exports rose 31.3 per cent to US$ 546.4 billion and imports rose 16.0 per cent to US$ 478.1 billion, resulting in a trade surplus of US$ 68.3 billion.

Actual utilization of foreign investment slid by small margin. The contracted value of foreign direct investment was US$ 130.3 billion, up 21.8 per cent but the actually utilized foreign capital decreased 2.1 per cent to US$ 43.2 billion.

China registered a surge in foreign exchange reserves which reached US$ 769 billion by the end of September, an increase of US$ 159.1 billion compared with the beginning of the year.

VIII.Household income increased rapidly.

The per capita disposable income of urban households totaled 7902 yuan in the first nine months, a year-on-year rise of 9.8 per cent in real terms. Farmers per capita cash income was 2450 yuan, a year-on-year rise of 11.5 per cent after price factors are considered.

The above statistics demonstrate that, the nation s economy has continued to develop towards the target of macro-regulation as a good momentum of steady and rapid growth is maintained. Nevertheless, there are still problems existing in economic performance including a weak agriculture infrastructure refraining further improvement in grain production and farmers income, oversize and irrational structure in investment in fixed assets, noticeable foreign trade imbalance and much slowed increase in profits in some industrial sectors. The goals in economic and social development set in the beginning of the year will be achieved for the whole year so long as we continue to implement in real earnest macro-regulation policies and measures in the fourth quarter.