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Expert: Economy not overheated in all areas
(China Daily)
Updated: 2004-07-19 08:10

It is not correct to say that China's economy is overheated on the whole, the chief economist of the National Statistics Bureau said in Guangzhou on Saturday.

Although there are signs of a generally overheated investment, consumption remains "cold;" although "feverish" development has been witnessed in the secondary industry, the heat is far from high enough for the primary and tertiary industries, said Yao Jingyuan, who is also spokesman of the statistics agency.

China's gross domestic product rose by 9.7 per cent in the first half of this year compared with some people's prediction of 11 per cent. This shows the government's macro-control policy has worked, said Yao at a symposium on China's enterprises' operation overseas held in Guangzhou, South China.

Industrial production did grow rapidly in the first quarter, but it slowed down month by month in the second quarter. Meanwhile, financial revenue, enterprises' profits and people's income all rose by a big margin in the first half year, said Yao.

He also ruled out the possibility of a galloping inflation in China, saying that the growth in the general price level remains in a controllable range and is tending to drop.

China witnessed inflation in 1988 when the consumer price index grew by 18 per cent, and inflation hit the country again in 1993 and 1994 when the index jumped by 24.1 per cent. "The growth rate for the first half of this year is only 3.6 per cent," he said.

Yao also supported his judgment by the big growth in the country's foreign trade and volume of foreign investment it had utilized.

According to statistics, foreign-invested enterprises in China had a contribution of 57.3 per cent to the nation's foreign trade in the first half of the year, compared with 53.9 per cent for last year. Some US$33.9 billion of foreign investment was used in the six months, up 12 per cent from a year earlier.

He also pointed out the major problems that might affect the economic growth adversely if not handled properly. The problems include the excessive large scale of fixed assets investment, the shortages of coal, electricity, petroleum and means of transportation, and the sharp increase in the prices of raw materials.

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