National Economic Growth Reported to Reach Eight Percent

China's GDP growth will approach 8 percent this year, and fall to about 7.5 percent in 2001, according to a report released November 23 by the

Macroeconomics Research Institute under the State Development Planning Commission.

"If the government continues its policies to extend domestic demand, and especially continues a proactive fiscal policy, the GDP growth rate will be kept at around 7.5 percent," said the report.

The report said that the country has left the shadow of the Asian financial crisis behind and both macro and micro-economy operations have witnessed a revitalization this year.

In 2000, China achieved rapid growth in exports. The report predicted that the export growth for the whole year will be 25 percent, while that of imports will reach some 35 percent.

Strong domestic consumer demand has become the major driving force for the rapid development of the economy this year. In the first half of the year, consumer demand contributed 58.8 percent of the 8.2 percent economic growth.

Social retail sales for the whole year will increase by at least nine percent, 2.2 percent higher than last year's figure, returning to the level of before the 1997's Asian financial crisis.

Increases in investment greatly depend upon government injections and in particular, treasury bonds, the report said, adding that the non-government investment has picked up a little.

The report predicted a ten percent growth in fixed asset investment, basically meeting the target set at the beginning of this year.

The report pointed out that the imbalance in development between the urban and rural areas as the major problem in the current economic growth.

It noted that the urban economy and manufacturing industry have witnessed a much faster growth rate, compared with the rural

economy, which is less affected by policy and demand.

The structural obstacles which have stifled the revitalization of non-government investment have not been solved effectively, said the report.

The government has decided to ease the restriction on non-government investment in many fields, and fiscal and technical support for medium and small-sized businesses have been taken into effect or are under consideration, but it will take a long time to produce any real effect, said the report.

The report urged the government to continue the policies of extending domestic demand and adopting proactive fiscal policy, to ensure a comparatively rapid growth.

The government should also deepen reform and speed up economic restructuring to improve economic quality and efficiency, added the report.

GDP Predicted to Top US$1 Trillion: SIC

According to the estimate by the State Information Center (SIC) in its newly finished "Analysis of China's Macroeconomic Situation in 2000 and Prospects for 2001", China's GDP this year will exceed US$1 trillion for the first time.

In the opinion of the report, a major turning-point is expected to emerge in the operation of China's national economy in 2000, it's initially estimated that the total value of China's GDP this year will reach 8,928.3 billion yuan, an increase of 8.3 percent calculated on the basis of comparable price, or US$1,078.3 billion converted in accordance with the current exchange rate, representing a historical leap. The per-capita GDP will reach US$849, basically attaining the second-step strategic goal for the modernization drive.

8.2 Percent in First Three Quarters

The Gross Domestic Product of China grew 8.2 percent year-on-year to 6,212.4 billion yuan (US$748.48 billion) in the first nine months this year.

Of the total, agricultural, industrial and service sectors grew 2.2 percent, 9.8 percent and 8.1 percent, respectively, said Ye Zhen, spokesman with the National Bureau of Statistics, at a press conference in Beijing October 16.

What's the Significance of 8.2%

China's 8.2% growth rate in its GDP during the first quarter has pushed China back up to the top of the list of the world's fastest growing economies. This growth rate shows that not only has China escaped the influence of the Asian financial crisis, but indicates that China's economy is starting to get back on track.

Compared with some years in the nineties, an 8.2% growth rate wasn't too high. But because this growth rate was achieved in an unprecedented complex domestic and international environment, it has a special significance.

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