China's GDP for the first half of 2010 was 17.284 trillion yuan ($2.55 trillion), up 11.1 percent over the same period last year based on preliminary statistics, said the National Bureau of Statistics (NBS). The growth rate was 3.7 percentage points higher than a year earlier.
NBS spokesman Sheng Laiyun released data on China's national economy for the first half of the year at a July 15 press conference at the Information Office of the State Council.
From January to June, fixed asset investment reached 11.4187 trillion yuan ($1.69 trillion), up 25 percent year on year. Retail sales of consumer goods reached 7.2669 trillion yuan ($1.07 trillion), up 18.2 percent. In the six months, the consumer price index rose 2.6 percent year on year. In June, the index declined 0.6 percent over the previous month.
Urban residents' average disposable income in the first half of this year was 9,757 yuan ($1,441), up 10.2 percent over the same period last year. After inflation adjustment, the growth rate was 7.5 percent. Rural residents' average cash income reached 3,078 yuan ($455), up 12.6 percent, 9.5 percent after adjusting for inflation.
China's fiscal revenue in the first half of this year totaled 4.33498 trillion yuan ($640.32 billion), up 27.6 percent year on year, said the Ministry of Finance on July 15. In June, fiscal revenue reached 787.94 billion yuan ($116.39 billion), up 14.7 percent. The Ministry of Commence on the same day said paid-in foreign investment to China amounted to $51.43 billion from January to June, up 19.6 percent year on year.
Economy Remains Robust in the First Half
China's economy continued to perform steadily and strongly in the first half of 2010 against a backdrop of complicated developments at home and abroad.
National Bureau of Statistics (NBS) spokesman Sheng Laiyun gave a midyear report on the economy on July 15 at the Information Office of the State Council. In the first half, China's GDP increased 11.1 percent over the same period last year, while the consumer price index (CPI) jumped 2.6 percent, said Sheng, who is also Deputy Director General of the NBS' Department of Comprehensive Statistics.
The figures show the national economy is continuing to develop in line with the government's macroeconomic regulation, he said. In general, China's economy maintained good momentum, with rapid growth, high employment and low inflation.
By way of illustration, Sheng made these six points:
—In terms of real economy, China's GDP grew 11.1 percent in the first half of the year, 3.7 percentage points higher than a year ago. Agricultural production was stable. Although China's summer grain output fell 400,000 tons from a year ago, the output was the third largest since the founding of the People's Republic of China in 1949.
Added value of industrial companies with annual sales above 5 million yuan ($730,000), which are termed "industrial companies above the designated size," continued to increase rapidly, with an annual growth rate hitting 17.6 percent.
—Among the three factors (investment, consumption and exports) that drive China's economic growth, the roles of domestic consumption and exports have become more prominent and balanced.
Fixed asset investment rose 25 percent in the first half of the year. The rate, although not as high as a year ago, was still quite high. Retail sales of consumer goods also increased at the rapid rate of 18.2 percent. Foreign trade recovered rapidly, with total imports and exports soaring 43.1 percent. Of these, exports recorded the faster growth rate of 52.7 percent.
—In terms of environment for economic development, the CPI went up 2.6 percent from January to June. While 1.4 percent was attributed to price hikes last year, price rises this year represented 1.2 percent. Prices are generally stable and under control.
—In terms of employment, more than 5 million people became newly employed in urban areas in the first half of the year, while migrant workers from rural areas to become employed increased 6.32 million.
—Economic growth was high quality. In the first half of the year, government fiscal revenue, the profits of industrial companies above the designated size and the average income of urban and rural residents grew 27.6 percent, 81.6 percent, 7.5 percent and 9.5 percent respectively.
—Progress was also made in macroeconomic regulation of key sectors. Housing prices dropped 0.1 percent in June over the previous month. As China stepped up efforts to save energy and cut greenhouse gas emissions, growth of energy-intensive industries declined sharply in the second quarter.
China's GDP grew 10.3 percent in the second quarter, down 1.6 percentage points from the first quarter. During the same period, the growth rate of industrial companies above the designated size fell 3.7 percentage points. Given this decline, will China be able to achieve its goal of 8-percent GDP growth this year?
Sheng said he believes the decline mainly resulted from the modification of last year's figures and the government's macroeconomic policies. Revised GDP growth rates in the first and second quarters of last year stood at 6.5 percent and 8.1 percent respectively. The growth rates of industrial companies above the designated size in the first and second quarters of last year were also revised to 5.1 percent and 9.1 percent respectively. The upward revision of these figures is a prime reason for the dropping growth rates of the GDP and the industrial companies above the designated size in the second quarter of this year.
Despite the drop, the GDP growth rate in the second quarter of this year is still normal and largely consistent with the average growth rate in the second quarters of the past 10 years, Sheng said. Moreover, the output of major industrial products continued to increase in the second quarter of this year.
The drop in the GDP growth rate is conducive to preventing economic overheating and promoting economic restructuring and the change of economic development mode, objectives of the government's macroeconomic regulation, he said.
The economic growth in the first half has paved the way for the realization of the economic goals for this year, Sheng said. Nevertheless, while domestic and international environments for economic development remain complicated, many problems will continue to haunt China's economy. In this context, the government should persist with a proactive fiscal policy and a moderately loose monetary policy. It should also implement these policies with proper focuses and timing.
Prices under control
Regarding the 0.6-percentage-point decline in the CPI in June over the previous month, Sheng explained the index dropped partly because the government attached great importance to managing inflation expectations and liquidity problems in the first half of the year. Also, the abundant supply of vegetables and fruits in June caused vegetable and fruit prices to go down, leading to falling food prices.
Despite the decline in grain output, food is now in adequate supply and food prices are unlikely to rise sharply, Sheng said. From July on, last year's price hikes will no longer have a major carry-over effect on CPI calculation. In addition, the supply of industrial products has been exceeding their demand, preventing prices from going up. Therefore, it is possible to keep the CPI growth in 2010 at around 3 percent, Sheng said.
At the same time, he said, although currently prices are not under severe pressure to go up, the price trend in the second half of the year remains uncertain. The government should see to it that expectations for inflation are well managed.