China's Economy Grows Healthily

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Last updated at: (Beijing Time) Wednesday, July 10, 2002

China's Economy Grows Healthily

The performance index of Chinese enterprises in the second quarter rose to its highest level in 12 months, indicating a health growth of the national economy.

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The performance index of Chinese enterprises in the second quarter rose to its highest level in 12 months, indicating a health growth of the national economy.

The National Bureau of Statistics (NBS), in its latest report, said industry and construction enterprises, which contributed morethan half of the country's gross domestic product (GDP), had witnessed remarkable improvements in performance in the first half this year, with sales and profits increasing by a big margin.

Statistics showed that the growth rate of China's industry sector reached 12.4 percent in the first six months of the year, compared with 9.9 percent year-on-year and 10 percent predicted at the beginning of this year.

A total of 97.11 percent of industrial products were sold in the first half year, also higher than the same period of last year.

In May industrial enterprises curbed the drop in profits which began in September last year. In the first five months this year, they reported a year-on-year rise of 2.8 percent in net profits and a 12.3-percent rise in sales income.

The improvement in the performance of industrial enterprises resulted in an increase in the country's fiscal revenue. In the first five months, China saw a growth of three percent in fiscal revenue, though a 7.8-percent drop was recorded in the first quarter of the year.

Jin Renqing, director of the State Administration of Taxation, said it was possible to fulfill the goal of collecting 100 billionyuan (12 billion US dollars) more tax revenue set for this year.

Economists say the improvement in enterprise performance can beat tributed to increase in exports and the continued efforts for industrial restructuring and reform of state-owned enterprises (SOEs). In the January-May period, both the profit rise and loss reduction of SOEs were higher than the national average.

In the field of agriculture, the NBS report showed the total area sown to low-quality wheat, rice and cotton dropped considerably, while that of more profitable crops such as tobacco and fiber crops increased by a big margin.

China also maintained an equilibrium in the balance of paymentsin the first five months, with a trade surplus of more than 10.4 billion US dollars recorded in May. Total foreign exchange reserves reached 227.6 billion US dollars in March.

The exchange rate of the Chinese currency against hard currencies stayed at the same level as at the beginning of the year and the rate of inflation stood at about one percent in the first half year. The four biggest state-owned commercial banks reported a reduction of 1.9 percentage points, on average, in their non-performing loans.

According to forecasts from the Chinese Academy of Social Sciences, the registered jobless rate in urban areas in the first half year would be 4.5 percent lower than what was predicted at the beginning of the year, as the index of enterprises' labor demands reached its highest level for several years in the second quarter.

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