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Six problems hinder eonomic growth
( 2003-08-25 07:02) (China Daily)

Qiu Xiaohua, deputy director of the National Bureau of Statistics, said on Saturday that six problems are hindering China's economic growth.

Qiu Xiaohua (file photo)
He said at a forum on enterprise management that these problems are weak consumption, the lagging service industry, high pressure on employment, difficulty in raising farmers' incomes, rapid increases in loan amounts of and wasteful duplication of construction projects.

Qiu noted that China's economy is still on the fast track, and the impact of the outbreak of severe acute respiratory syndrome (SARS) is temporary.

The target of a 7 per cent economic growth set for this year is "very possible" to achieve, said Qiu, adding that it may even reach 8 per cent.

Analyzing this year's economic development, Qiu said that demand and investment have played a more prominent role in the economy, and the manufacturing industry is its major driving force.

However, Qiu admitted that problems have been exposed in the current course of economic development.

Qiu noted that worldwide, on average, 70 per cent of economic growth comes from consumption, while investment contributes only some 20 per cent. In China, investment contribution has been 13 percentage points higher than the global average, while that of consumption is 17 to 18 percentage points lower than the world's average in recent years. The gap is even bigger in this year's economic development, he noted.

Statistics show that in the first half of this year, 70 per cent of economic growth came from investment.

According to Qiu, the weak service industry might increase pressure on employment, which is already in a strained state. In 2003, China's newly added labour force will reach 10 million, including 2.12 million college graduates.

By the end of June this year, the registered unemployed population had reached nearly 8 million, or 4.2 per cent of the total population. In the meantime, the outbreak of SARS put nearly 7 million rural residents out of work.

The SARS outbreak also reduced the income of farmers-turned-labourers, and depressed the demand for farm produce, thus affecting the income of rural people. Qiu also warned about the trend of a rapid increase in the total size of loans, which stood at 1.76 trillion yuan (US$210 billion) in the first half of this year. This figure equals the total amount of newly increased loans for last year.

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