'Unexpected Good' Result in Economy 2002: Yearend Review

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Last updated at: (Beijing Time) Friday, December 13, 2002

'Unexpected Good' Result in Economy 2002: Yearend Review

Speaking of China's economic situation this year, scholars and experts almost uttered unanimously in one breath "unexpected good". The continuous rising of indexes in export, investment, consumption and other aspects have provided strong support for the expected 8 percent economic growth.

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China's Economy Grew 7.8 Percent in First Half Year

Macroeconomy situation

This year's economy is to grow by about 7 percent, said Zeng Peiyan, Minister in Charge of the State Development Planning Commission, in his "Report on the Implementation of the 2001 Plan for National Economic and Social Development and on the Draft 2002 Plan for Nation's Economic and Social Development" delivered at the Fifth Session of the Ninth National People's Congress on March 6, 2002.

But viewing from the current situation, the whole-year GDP growth is likely to be at 8 percent. More important, the whole economic situation didn't display the trend of "first grow fast and then slow down" as estimated at the year beginning. On the contrary, it ran higher and higher with the growth rate registered at 7.6, 8.0, 8.1 percent respectively for the last three quarters, and estimated to be between 8.1 and 8.3 percent for the fourth quarter. The economic aggregate this year is expected to exceed 1 billion yuan, a record in history which marks a new level of comprehensive national strength. Besides, we began to push forward economic development by both government policies and market operation, instead of only by the former as in the past.

Foreign trade surplus

No precise predictions were made on the total volume of import and export at year beginning by related departments considering various elements. However, under global economic depression China achieved the best foreign trade development, foreign trade and economic cooperation minister Shi Guangsheng said recently.

In the first year of WTO entry, we achieved a comparatively stable and predicable international trade environment, with an unexpected export growth rate of 9.9 percent registered for the first quarter. In April the monthly export worth surpassed 50 billion US dollars for the first time, and the following months also saw new records over the same period in history, in September the figure reached 31.9 billion US dollars. It is estimated that this year's import/export volume may surpass 600 billion dollars, and the country may leap from sixth to fifth place in world trade ranks.

The surprising rapid trade growth can be attributed to two important reasons. First, the global economy still in slow growth and market demand is basically better than expected. Secondly, with accelerated foreign trade system reforms, more enterprises got permit for export business, and the export policies were also improved.

Investment demand

At the year beginning the government put forward the goal of 10 percent growth of total investment in fixed assets. But with the early publication of treasury bond plans and arrival of fund, together with active non-governmental investment, the total investment rose rapidly with the January-October growth rate standing at 24.1 percent, and that from January to November expected to be over 20 percent.

Foreign capital also flew in at a great speed and in remarkable scale, expert said. In the last ten months China gave permission to establishment of 27,630 foreign-funded enterprises, up 34.5 percent, with a contract investment of about 75 billion US dollars, 35.9 percent higher, and a realized investment of 44.7 billion dollars, 20.1 percent higher. The whole-year realized foreign capital is to go beyond 53 or 54 billion dollars and China is likely to become for the first time the world biggest country in attracting foreign direct investment. According to world investment report by the United Nations Conference on Trade and Development, China has taken the first place for nine successive years in foreign investment attraction among developing countries and regions.

Industrial production

This year's industrial production witnessed high-speed output increasing, with the growth rates of the last three quarters standing at 10.9, 11.7 and 12.2 percent respectively. By the end of November the nation completed a total industrial added value of 2826.6 billion yuan, 12.4 percent up and 2.5 percent higher than the whole previous year. A total profit of 437.4 billion yuan was realized from January to October, up 16.3 percent.

With more and more support from financial institutions, the growth of industrial investment was apparently sped up. Energy production such as coal, power and crude oil remained stable and heavy industry picked up quickly. The hi-tech focused electronic and medical industries experienced fast development and electronic communication and transportation equipment manufacturing as well as chemical industry have become pillar industries to help lift up industrial growth. Meanwhile, expanded communication equipment export also contributed to the whole industrial growth.

Consumption

The consumption field saw new growing points as on housing, tourism and car, especially the last item, which has kept a 50 percent growth rate and nearly 70 percent purchase made by private buyers.

While housing consumption increased by over 30 percent, we saw more than 90 percent commercial houses bought by individuals, along with the booming of housing loans.

Electronic products such as mobile phone, microcomputer, color TV and DVD entered common households at a faster pace. Communication devices saw over 62 percent sales growth in the last 3 quarters and telephone users exceeded 400 million by the end of October.

WTO impact

Thanks to full preparedness and proper responding measures, the WTO didn't bring catastrophic impact on some sensitive departments. The automobile industry got unprecedented improvement in both scale and performance with accelerated structural adjustment. The service trade is being opened up on timetable. Adjustment of agricultural structure saw remarkable progress and the January-October trade surplus was equal to that of the whole previous year.

With the further recovery of global economy, continuous implementation of pro-active fiscal and stable monetary policies and opening wider, it can be predicted that the economic indexes are going to remain at a certain level with the growth rate, say assuredly possible, to be held over 7 percent next year.

By PD Online Staff Member Li Heng

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