China's Economy to Grow 7.4 Percent, GDP to Top US$1.15 Trillion This Year

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Last updated at: (Beijing Time) Friday, December 21, 2001

China's Economy to Grow 7.4 Percent, GDP to Top US$1.15 Trillion This Year

China's national economy will grow by 7.4 per cent this year and the information industry secured its position as the nation's biggest economic sector with almost 30 per cent growth. The increase will be promoted by fixed assets investment and domestic consumption, while the role of foreign trade weakened due to the lower demands of the international market.

China's national economy to grow by 7.4%

China's national economy will grow by 7.4 per cent this year and the information industry secured its position as the nation's biggest economic sector with almost 30 per cent growth, according to government officials.

"We will see a fast increase in the gross domestic product (GDP) with a low inflation rate this year, fulfilling our goal," said Xie Youqiao, deputy director-general of the Economic Operation Bureau of the State Economic and Trade Commission.

He revealed on Thursday at the Fourth China Information Industry Annual Convention this year's GDP will be more than 9.5 trillion yuan (US$1.15 trillion).

Xie pointed out that 97 per cent of the increase will be promoted by fixed assets investment and domestic consumption, while the role of foreign trade weakened due to the lower demands of the international market.

By the end of October, Chinese citizens had deposited approximately 7.2 trillion yuan (US$870 billion) into banks, increasing by 750 billion yuan (US$90 billion) over the same month in 2000, while tax revenues for the nation grew by more than 200 billion yuan (US$24 billion) to 1.25 trillion yuan (US$150 billion) compared with the same period last year.

China's foreign exchange reserve was US$203 billion and foreign direct investment amounted to US$55.2 billion by October 31.

Two features in this year's economic landscape

The gradual slowdown of the growth from the beginning of the year and the decreasing profits of State-owned enterprises (SOEs) have been two major features in this year's economic landscape, according to Xie.

The growth of the GDP in the fourth quarter is expected to be around 6.5 per cent, dropping by 1.6 per cent compared with the first quarter.

Meanwhile, although SOEs' production this year will increase 9.5 to 9.8 per cent, their profits are estimated to be lower than the previous year.

"It is very pressing we solve these two problems to maintain a rapid growth," Xie said.

He predicted China's GDP will continue to grow by about 7 per cent next year, although it may be tough to achieve taking into account the intense competition for domestic enterprises face as a result of tariff reduction following China's the World Trade Organization (WTO) entry and the uncertainty about the recovery of the world's economy.

The information industry remained the biggest national economic sector for the country with an output value of 1.95 trillion yuan (US$236 billion).

Information sector believed a pillar for economic development

The electronics and information product manufacturing reached 1.35 trillion yuan (US$163 billion), an increase of about 25 per cent, while the production of telecommunications was 600 billion yuan (US$73 billion), growing approximately 27 per cent.

Xu Qin, deputy director-general of the Department of High-tech Industrial Development under the State Development Planning Commission (SDPC), said the present depressions of the information industry (IT) in developed countries provides golden opportunities for the IT in China.

"Developed countries have bigger bubbles in their information sectors than China, so they need to spend more time to recover and the work will be more difficult, so China should grasp the chances to catch up," Xu said.

Xu believed the information sector will continue to be a powerhouse for the national economy and continue to grow about 20 per cent in the coming five to 10 years.

He revealed that the SDPC will carry out special support projects for the development of information industry next year.

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