China economy: recovery, rebalance and restructuring -- Business -- People's Daily Online
China economy: recovery, rebalance and restructuring

10:27, August 14, 2009

Positive signs not reason for blind optimism

China's July economic data prove that the central government's policies and economic stimulus package to cope with the international financial crisis are correct, timely and effective.
However, a trend of sound economic recovery does not mean that the difficult period is over. China must not become blindly optimistic because of increasing positive factors. People should soberly recognize that at present China's economic development is entering a critical period.

China's July economic figures - Special

· China's July fiscal revenue up 10.2%

China's fiscal revenue in July rose 10.2 percent year on year to 669.59 billion yuan (97.96 billion U.S. dollars). Fiscal revenue has been on the rebound since May, when 4.8 percent annual growth was registered.

· China to secure 2 trillion USD foreign trade in 2009: MOFCOM

Although China's exports went down by 22 percent for the first seven months and exports in July continued falling year on year, exports have actually rebounded month on month since March. China's foreign trade can reach 2 trillion USD for the whole year despite difficulties.

· China's export to resume growth in Q4: institutional forecasts
· Chinese, foreign autos both speeding in China - Special

Auto markets worldwide have been hit hard by the global financial crisis. However, China's auto sales kept growing, surpassed the US market and became the world's largest. A "Chinese opportunity" is granted to carmakers.

· China's coastal regions become new poles of economic growth

Economic zones in coastal regions, which are being planned at a fast pace, will make full use of their geographical advantage, and are expected to become China's new poles of economic growth.

· What leads to the "slow" growth in east China?
· What puts China's mid-west on fast track?

During the first half of 2009, GDP growth rate of central and western China was significantly higher than the national level. Among the 6 provinces with GDP growth higher than 12%, 5 are in the central and western region.

· China approves new economic zones in Liaoning, Jiangsu, the western side of Taiwan Strait, as well as NW China's Gansu and Shaanxi
· Consumption potential in rural market needs further boost

Retail sales of consumer goods in urban areas rose by 15 percent in May, while in rural areas the growth rate is 15.6 percent. However, much still needs to be done to exploit the full potential.

· China to carry out rural social pension projects

"Building a new rural social pension system is key to reducing rural poverty and narrowing the gaps between urban and rural areas. It was also key to maintaining social stability and promoting domestic consumption."

· Minister: no new iron and steel projects within three years

There is a significant overcapacity in China's iron and steel industry. "If this situation continues, there is no way out for China's iron and steel industry."

· Minister: greater market access needed

Industrial restructuring means it is necessary to draft and improve industrial policies in various sectors and raise market access, said Li Yizhong, Minister of Industry and Information Technology.

· China to release energy-saving guide for key industries in H2

China's current energy structure will be maintained for a long time, and industry shoulders the major task of energy-saving and emission reduction. Ministry of Industry and Information Technology will issue guidance on energy saving and emission reduction for key industries in the second half of 2009.

· China passes draft regulation to enforce environmental evaluation on projects
· Central bank: new loans slowdown reasonable

"The July figure is lower than those of the first six months of 2009, it is much higher than the average level of July’s new loans in the previous seven years."

· China's state-owned banks shift focus to credit control and restructuring
· NDRC: Economic restructuring makes new progress

According to the NDRC, central government-owned firms have undergone active restructuring since the start of the year. While in rural areas, financial services have been expanded in order to make credit more accessible to farmers.

· Overcapacity undermines China's industrial recovery

"Excess production capacity and blind investment in some industries were still major problems."

· China's 4 trillion yuan investment structure reasonable

Central investment totaling 380 billion yuan has been allocated to local level, as part of China's 4-trillion-yuan stimulus package. Not only has the allocated investment achieved some effect, but also its structure is reasonable.

· China prevents repetitive construction in 4 trillion yuan investment

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