Xi Yanchun:

Thank you Ms. Liu for your introduction. Now, the floor is open for questions. Please identify yourself before asking your question.

China Central Television (CCTV):

You just mentioned that some of the economic indicators were still declining in August, which has drawn public concern. How do you see the overall economic performance of that month? Thank you.

Liu Aihua:

Thanks for your question. According to what I introduced just now, the Chinese economy has both maintained stability while taking a turn for the better, which can be seen in the following five aspects:

First, growth is stabilizing. According to the main growth indicators, the added value of industries above designated size from January to August increased by 6.7 percent, up 0.7 percentage points year-on-year. In August alone, the rise was 6.0 percent year-on-year, indicating maintenance of steady growth. From January to August, the service sector producer price index reached 8.3 percent, up 0.2 percentage points year-on-year; in August alone, the figure was also 8.3 percent, up 0.9 percentage points year-on-year. So, the growth was quite steady in regard to the production side. In terms of demand, total retail sales of consumer goods grew by 10.4 percent in the first eight months of this year, up 0.1 percentage point over last year. Investment growth also remained stable, with a year-on-year increase of 7.8 percent in fixed asset investment during the period. Investment in areas of perceived weakness also maintained rapid growth. Moreover, imports and exports maintained double-digit growth. Therefore, demand-side growth was also quite stable.

Second, employment has seen an upward turn. In August, the surveyed unemployment rate in urban areas remained stable, with the figure remaining below 5 percent in 31 major cities, a slight decline over the previous month. The weekly working time in industrialized enterprises increased by 0.07 hours compared to July. A total of 9.74 million jobs were created in urban areas from January to August, up 260,000 year-on-year. August saw a slight rise over July.

Third, increases in commodity prices have remained mild. In August, the consumer price index (CPI) rose by 1.8 percent year-on-year, and 0.4 percent month-on-month. This can be considered a moderate level compared to the same period in previous years and when set against other major world economies.

Fourth, the structure is continued to be optimized. In terms of industrial structure, high-tech industries have maintained relatively rapid growth, with their added value rising by 12.9 percent year-on-year in August, up 0.8 percentage points over the previous month; the added value of equipment manufacturing industries rose by 11.6 percent, up 0.9 percentage points. At the same time, manufacturing industries with high-energy consumption saw a slowdown, with growth of 2.9 percent in August, down 0.4 percentage points. In regard to the demand side, products that meet higher consumer demand grew fast. In August, sports and entertainment products as well as communications equipment registered double-digit growth, up 14.9 percent and 12.2 percent year-on-year respectively. The investment structure is also improving. On one hand, investment in high-tech manufacturing grew by 19.5 percent year-on-year; on the other hand, traditional sectors are also speeding up their transformation showed by the fact that investment in technological improvement for manufacturing grew by 11.4 percent from January to August. In addition, investment in infrastructure and in areas of perceived weakness also picked up. Since the beginning of this year, infrastructure investment has risen by 19.8 percent year-on-year; investment in environmental protection, public facilities, road transportation and other areas of perceived weakness enjoyed a growth of over 20 percent. Therefore, investment in industrial upgrading is quite obvious.

Fifth, quality has improved. From January to July, profits in industrialized enterprises above designated size increased by 21.2 percent, up 14.3 percentage points year-on-year. Operating profits of the service sector in the same period grew by 22.6 percent. Fiscal revenue continued a desirable growth rate. From January to August, general public budgets grew by 9.8 percent overall.

From the above five indicators, we can see that, from January to August, China’s economic growth was within a proper range with deepened structural adjustment, improved quality and positive and steady growth momentum.

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