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Opinion>China | |
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Internal drive stokes growth
The growth of private investment exceeded that of
government investment this year, while the consumer price index (CPI) began
increasing for the first time in years. The CPI rose 3 per cent in November on a year-on-year
basis, compared with an average of 0.3 per cent in January and
February. Gross domestic product (GDP) for the first three quarters
totalled 7.9 trillion yuan (US$956.6 billion), up 8.5 per cent, according to the
National Statistics Bureau (NSB). The country expects an annual GDP growth of 8.5 per cent
of the year, said Qiu Xiaohua, the NSB deputy director. Industry reported a total added value of 2.88 trillion
yuan (US$350 billion) in the first three quarters, a year-on-year rise of 16.5
per cent, while government revenue rose by 22.5 per cent. The proactive fiscal policy has been carried out for six
straight years in China since the Asian economic crisis in 1998, while
government investment - such as treasury bonds - has been the engine for the
nation's economy. The government has issued 800 billion yuan (US$96.74
billion) in treasury bonds since 1998. Nevertheless, things have changed this
year. In the first eight months, government investment
accounted for 5.1 per cent of all investment, down from 14 per cent in the same
period of 1998. Investment in fixed assets in September was 6.3
percentage points down from June and was likely to go on falling in the fourth
quarter, said Ma Liqiang, director of the Economic Operation Monitoring Bureau
of the State Development and Reform Commission. During the first 11 months, State-owned and State-holding
companies reported 347.4 billion yuan (US$41.9 billion) in profits whereas
shareholding and foreign-funded companies earned 331.8 billion yuan (US$39.9
billion) and 239.7 billion yuan (US$28.9 billion)
respectively. The internal drive in part came from the growing demand
of domestic consumers, resulting from continuous economic growth in the past
decade, said Fan Jianping, an expert with the State Information
Centre. The past decade's growth had laid the foundations for a
significant jump in consumer demand in urban areas, Fan noted. The NSB predicted that China's GDP per capita was likely
to top US$1,000 for the first time ever this year and GDP to top 11 trillion
yuan (US$1.33 trillion). Consumer demand has undergone a major shift from daily
necessities like food and clothing to housing, luxury cars and
telecommunications, he added. Commercial housing sales increased by 43.9 per
cent and car sales by 77.1 per cent in the first seven months of this year over
the same 2002 period. The government should go on striving to create a fair and
favourable environment for non-State capital and companies by speeding up the
reform of administration and continuing to lower market entry requirements in an
effort to maintain the internal drive, said Li Boxi, a noted expert with the
Development Research Centre of the State Council.
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