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National Economy in the First Quarter of 2006

National Bureau of Statistics

April 20, 2006

In 2006, the national economy kept fast yet steady growth. According to preliminary estimation, the gross domestic product (GDP) of China in the first quarter of this year was 4,331.3 billion yuan, a year-on-year increase of 10.2 percent, which was slightly higher than last year's 9.9 percent growth. Of this total, the value-added of the primary industry was 320.0 billion yuan, up by 4.6 percent; the value-added of the secondary industry was 2,161.5 billion yuan, up by 12.5 percent; and the value-added of the tertiary industry was 1,849.8 billion yuan, up by 8.7 percent.

1. Agricultural production started well with steady increased acreage of grain crops.

According to the sample survey of farmers' intention on farm crops plantation, the expected planting areas for grain would reach 105 million hectares, a year-on-year increase of 0.7 percent. Of this total, the planting areas for summer grain was up by 1.4 percent, and 0.4 percent growth for autumn crops. The planting areas for early rice maintained stable. At present, the winter wheat was growing well, therefore, a good harvest of summer grain is foreseeable.

2. Rapid growth was seen in industrial production with further improved efficiency.

In the first quarter of this year, the total value-added of the industrial enterprises above designated size was 1,782.2 billion yuan, a year-on-year growth of 16.7 percent, or 0.5 percentage points higher than that in the first quarter of 2005 (growth in March was 17.8 percent with total value-added of 668.0 billion yuan). Of this total, the growth of heavy industry was 17.6 percent while that of the light industry was 14.7 percent. Analyzed by products, power generation and the production of coal was up by 11.1 percent and 12.0 percent respectively, the production of raw materials such as rolled steel, alumina, aluminum, and ten-kind of non-ferrous metals rose by 21.7 percent, 45.3 percent, 36.4 percent and 22.2 percent respectively. The production of electronic and telecommunication products such as microcomputers, mobile phones and fax machines rose by 40.1 percent, 57.1 percent and 21.5 percent. The production of motor vehicles went up by 36.3 percent, of this total, that of the cars went up by 70.5 percent.

Profits made by industrial enterprises increased rapidly. In the first quarter, the profits made by industrial enterprises above designated size stood at 336.3 billion yuan, a year-on-year increase of 21.3 percent. Of this total, profits by state-owned and state-holding enterprises were 158.4 billion yuan, up by 9.2 percent. In the first quarter, the sales ratio of industrial enterprises above designated size was 97.1 percent, down by 0.27 percentage points as compared with that in the first quarter of previous year.

3. Rapid growth was recorded in the investment in fixed assets.

In the first quarter of this year, the investment in fixed assets of the country was 1,390.8 billion yuan, up by 27.7 percent, or an increase of 4.9 percentage points as compared with the growth in the same period last year. Of this total, the investment in urban areas reached 1,160.8 billion yuan, up by 29.8 percent (the investment in March was 631.4 billion yuan, up by 32.7 percent); that in rural areas was 230.0 billion yuan, up by 18.1 percent. Of the total investment in urban areas, the investment in real estate development was 279.3 billion yuan, up by 20.2 percent, or 6.5 percentage points lower than that in the same period of last year (in March it was 135.6 billion yuan, up by 20.7 percent). The investment in the primary industry was up by 47.1 percent that in the secondary industry was up by 32.7 percent and 27.5 percent growth for investment in the tertiary industry. In terms of different sectors, the investment in coal mining went up by 43.2 percent that in manufacturing industry was up by 36.3 percent, that in transportation, storage and postal services rose by 29.6 percent and 22.3 percent growth for investment in water conservancy, environment and public facilities management.

4. Sales on domestic markets speeded to some extent.

In the first quarter, the total retail sales of consumer goods reached 1,844.0 billion yuan, a year-on-year rise of 12.8 percent (it was 579.7 billion in March, up by 13.5 percent), or a real growth of 12.2 percent or 0.3 percentage points higher after deducting price factors. Of the total, the retail sales in urban areas reached 1,241.0 billion yuan, up by 13.5 percent, the retail sales at and below county level stood at 603.0 billion yuan, up by 11.5 percent. In terms of different sectors, the sales by wholesale and retail business was 1,555.1 billion yuan, up by 12.9 percent and that by lodging and catering industry was 254.2 billion yuan, up by 14.2 percent.

5. Market prices rose moderately.

China registered a year-on-year rise of 1.2 percent (it was 0.8 percent growth in March) in total consumer price level in the first quarter, or 1.6 percentage points lower compared with the same period of last year. The price rose by 1.2 percent in cities and 1.1 percent in rural areas. In terms of commodity categories, prices for food rose by 1.9 percent, or a drop of 4.2 percentage points compared with the same period of last year, and prices for housing were up by 5.0 percent. Prices for other categories of commodities either maintained the same level or had slight decline. The retail prices of commodities rose by 0.5 percent year on year in the first quarter (a 0.2percent growth in March). The producer's price for manufactured goods rose by 2.9 percent (2.5 percent growth in March). The purchaser's price for raw material, fuel and power rose by 6.5 percent (6.2 percent in March).

6. Foreign trade continued to grow rapidly and foreign direct investment continued to increase.

The total value of import and export for the first quarter was US$ 371.3 billion, up 25.8 percent year, or 2.7 percentage points higher. Of the total, value of export was US$197.3 billion, up by 26.6 percent or 8.3 percentage points lower than the same period of 2005, and the value of import was US$ 174.0 billion, up 24.8 percent or 12.6 percentage points higher. The trade surplus was US$23.3 billion. The total value of foreign capital actually utilized was US$ 14.2 billion, up by 6.4 percent. By the end of March, China registered a total of US$875.1 billion in foreign exchange reserves, an increase of US$56.2 billion over the end of 2005.

7. Urban and rural residents' income kept fast growth.

In the first quarter, the per capita disposable income of urban residents was 3,293 yuan, a real growth of 10.8 percent, or 2.2 percentage points higher. The per capita cash income of rural residents was 1,094 yuan, up by 11.5 percent year-on-year in real terms, or down by 0.4 percentage point.

The above statistics show that the national economic and social development is on the upbeat featured by fast yet stable economic growth, improved enterprises efficiency, rapid income growth for urban and rural households, stable market prices and brisk external and internal demands. However, it should be noted that there are prominent problems that call for our attention, such as rapid growth of investment in fixed assets and of bank loans, and difficulty in maintaining agricultural growth and increasing farmers' income. However, as long as we continue to guide the overall economic and social development by a scientific approach to development, continue to follow various macroeconomic of the central government, enhance the monitoring of the trend of economic development, and adopt relevant measures to solve the existing problems, the national economic development will keep fast yet stable growth.

(China Development Gateway April 20, 2006)

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