Li Deshui, head of the Chinese National Bureau of Statistics (NBS), said in Beijing Tuesday that China had overcome the impact of the Asian financial crisis thanks to the substantial measures it had taken to fight both inflation and deflation over the past decade.
China's economic growth reached a seven-year high at 9.1 percent in 2003, a rate the top Chinese top statistician referred to as a milestone since the growth rate. This is much higher than estimated by many international analysts at the end of last year.
In fact, the surge of industrial output turned out to be the major driving force behind the rapid economic growth. NBS figures showed the value turned out by the industrial sector last year accounted for 71.6 percent of the gross domestic product (GDP), contributing 6.5 percentage points to the 9.1 percent overall economic growth.
NBS spokesman Yao Jingyuan acknowledged that heavy industry had taken the lead in industrial growth, signifying the start of a comprehensive upgrading of the economy. This meant the Chinese economy was on a new stage of development.
On the demand side, a 26.7 percent surge in capital investment constituted one of the main factors for the record economic growth. As retail demand remained stable and export growth reached a new high of 37 percent, the economy registered a strong performance last year.
Li said the economy had entered a new era of growth as the per capita GDP topped US$1,090 in 2003. The rise of consumer demand would greatly spur the expansion of such industries as high-tech manufacturing and electronics, automobiles, housing and services.
Official statistics show China's car output amounted to over 2.07 million cars last year, up 80.7 percent over the previous year. A total of 112 million people subscribed to new telephone lines, equal to the populations of Britain and France combined. China had 532 million telephone subscribers by the end of 2003, more than the population in any other country worldwide except India.
The government had done well in 2003, in terms of the international recognized policy goals, namely economic growth, inflation, employment and external balance.
China's consumer price index was 1.2 percent for the year. Newly created jobs in urban areas totaled 8.5 million, exceeding the envisioned annual target of 8 million. Meanwhile, the country managed to retain a slight trade surplus and increased its foreign exchange reserves to US$403.3 billion.
However, Li noted, the economy had seen overheating in some sectors and areas of the country, a problem which should merit attention.
Yao said structural problems were still around in the economy as service industry accounted merely for 32 percent of GDP. There were repetitive construction in industrial sectors such as steel, automobiles, cement and electrolytic aluminum. The steel sector needed restructuring, and China, one of the world's top steel manufacturers, had to import about 30 million tons of steel yearly due to lack of production capacity of upper-end products.
Yao further noted that the gap in income growth between urbanites and rural residents widened last year. The disposable per-capita income of urban residents grew 9.3 percent in 2003, five percentage points faster than that of rural residents.
The vigor of small and medium-sized enterprises (SMEs) was yet to develop, he said. Official figures showed the output of large enterprises rose by 17 percent last year, higher than that of SMEs.
To tackle these problems, the government had decided to invest more in developing infrastructure in rural areas and raising the incomes of farmers. Official sources said some industrial sectors had developed plans to curb blind investment in repetitive capacity.
China would pursue inclusive, balanced and sustainable development, instead of seeking growth at any cost, Li said, predicting its economic growth rate this year would be lower than in 2003. However, he voiced his confidence that the economy would possibly grow more than seven percent
(Xinhua News Agency January 21, 2004)