BIZCHINA / Top Biz News

Macro economy suffers 'difficult time'
Updated: 2006-06-27 06:44

China's fixed asset investment, which cooled down a bit last year, has been growing rapidly so far this year, indicating that the country's macro economy is entering a "difficult time".

Official figures showed that China's fixed asset investment growth rate in May this year was 2.1 percentage points higher than that of the first quarter, and the trade surplus continues increasing.

China's economy will probably grow around 10 percent in the first half of the year, economists here predicted.

The National Bureau of Statistics said that in the first five months of this year, the investment of local governments, which made up about 90 percent of China's urban fixed asset investment, increased by 31.3 percent, up 2.5 percentage points from the same period a year ago.

A State Council meeting in mid-June has urged local governments to focus efforts on adjusting economic structure, changing growth patterns and deepening reforms.

The blind thirst for expanded investment and faster economic growth should be curbed, the meeting said.

Wang Tongsan, director of the Quantitive Economy Institute of the Chinese Academy of Social Sciences, told Xinhua that he believed China's current investment growth rate was "rather moderate" compared to that of 2003.

The macro economic situation is "not bad," he said, there were no "bottlenecks" in the sectors of coal, electricity, oil and transportation and the commodity price is "relatively low."

He warned, however, the central government should be on alert in regards of the rebounced overheated investment and adopt appropriate measures to curb the trend. Otherwise, this will affect the nation's economy to develop "fast and sustainably," he said.

China is determined to adjust the investment and consumption structure and aims to realize a balanced international trade and balance of payments during the 11th Five-Year (2006-2010) plan period.

Page: 12

(For more biz stories, please visit Industry Updates)