GDP growth to top 9% in first half - MOC
(people.com.cn)
Updated: 2004-06-03 15:20

Report on China's Foreign Trade issued by Chinese Academy of International Trade and Economic Cooperation under the Ministry of Commerce on June 2 predicted China's economy in the second quarter would basically keep in pace with that in the first one and the GDP growth for the first half of year would top 9 percent.

In an outlook for China's macro-economy in 2004, the report believes a stable development is achievable through successful macro-control. This means, the report stated, consistency and stability of macro-economic policies has to be secured on one hand and proper adjustments have to be made on policy implementation in a appropriate way and time.

In fact, the report has based its judgment on the following factors.

Firstly, the national economy is in the rising period of a new round of growth. The fast economic development in 2003 has laid a good foundation for this year. The 3rd and 4th quarter of 2003 witnessed a growth of 9.6 percent and 9.7 percent. Standing at 9.7 percent for the 1st quarter of this year, the speed showed no slowdown.

Secondly, much vigor has been seen in subjects of micro-economy. Their confidence has been buoyed up by remarkable improvement in profits making among businesses in 2003. So has Consumers' confidence index. Consumption of housing, autos, communication and tourism will continue to heat up.

Thirdly, macro-economic policies will maintain consistency and stability. The policy of boosting domestic demands, proactive fiscal policy and steady monetary policy will all be adhered to in 2004. Flexible micro-adjustment to be adopted will solve prominent problems in the economy.

Fourthly, possibility of a better international economic environment is high. Uncertainties as there are, the world economic environment is generally improving. Major international organizations all geared up their expectation on world economic and trade growth for 2004 on the basis of 2003. This favors China's export.

However, the report reminds us of some problems in China's economy. The bottleneck of energy supply, such as coal, power and oil, as well as transportation, plus price hikes of basic energy and raw materials, will likely further hinder investment and export expansion.

The central government's efforts on reigning in overheating investment in some sectors through tightened bank loan and land use will be paid off and have the effect felt. As a result, enterprises will face more difficult financing environment and land supply. In addition, it is no easy challenge to score a fast-speed export growth on the base of that in 2003 which was already very high.

For a conclusion, the report forecasts a basically same speed of growth for the 2nd quarter as that in the 1st quarter in 2004. For the 2nd half of the year, the report expects it would be a little bit slower than that of the 1st half which is believed to exceed 9 percent. But generally China's economy will remain in a fast lane for the whole year, the report declares.

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