Department of Comprehensive Statistics

July 18, 2006

In the first half of this year, following the requirement of building a harmonious society and constructing an innovative-type country in the light of scientific approach to development, regions and departments at all levels actively carried out various policies and measures set by the central government and push forward various work in a down-to-earth manner which had lead to good national economic performance in the first half of 2006.

1. National economy kept fast and stable growth. According to preliminary estimation, the gross domestic product (GDP) of China in the first half of this year was 9,144.3 billion yuan, a year-on-year increase of 10.9 percent, or 0.9 percentage points higher than that in the same period last year. Of this total, the value-added of the primary industry was 828.8 billion yuan, up by 5.1 percent; the value-added of the secondary industry was 4,680.0 billion yuan, up by 13.2 percent; and the value-added of the tertiary industry was 3,635.5 billion yuan, up by 9.4 percent.

2. Agricultural production was good. Bumper harvest was seen in the production of summer crops for consecutive 3 years with total output reaching 113.8 billion kilograms, an increase of 7.4 billion kilograms, up by 7.0 percent. The growing of early rice is encouraging. In the first half of this year, the total output of pork, beef, mutton and poultry were 36.05 million tons with year-on-year increase of 4.4 percent.

3. Rapid growth was registered in industrial production. In the first half of this year, the profits made by industrial enterprises above designated size was 3,968.0 billion yuan, a year-on-year growth of 17.7 percent, (growth in June was 19.5 percent with total value-added of 781.8 billion yuan). Of this total, profits made by state-owned and state-holding enterprises went up by 11.8 percent; that of the share-holding enterprises was 18.7 percent and that of enterprises funded by investments from foreign business or from HK SAR, Macao SAR and Taiwan province was up by 19.0 percent. In terms of different industries, the growth of the heavy industry was 18.5 percent while that of the light industry was 15.8 percent. Analyzed by products, power generation and the production of coal were up by 12.0 percent and 12.8 percent respectively. The production of pig iron, and rolled steel rose by 20.8 percent and 25.8 percent respectively. The production of microcomputers and programmed switch-boards went up by 34.0 percent and 21.5 percent. The production of motor vehicles grew by 27.8 percent, of which, the growth of cars went up by 53.2 percent. In the first half of this year, the production and sales were good with the sales ratio of industrial enterprises above designated size standing at 97.4 percent. Profits made by industrial enterprises increased rapidly. In the first five months of this year, the profits made by industrial enterprises above designated size stood at 629.4 billion yuan, a year-on-year increase of 25.5 percent or 9.7 percentage points higher over the same period last year.

4. Investment in fixed assets speeded up. In the first half of this year, the investment in fixed assets of the country was 4,237.1 billion yuan, up by 29.8 percent, or 4.4 percentage points higher as compared with the growth in the same period last year. Of this total, the investment in urban areas reached 3,636.8 billion yuan, up by 31.3 percent or 4.2 percentage points higher. Of the investment in urban areas, that in real estate development was up by 24.2 percent, or 0.7 percentage point higher than that in the same period last year. In terms of different industries, the investment in heavy industry was up by 32.6 percent over the same period a year ago. Of this total, the year-on-year growth of investment in coal mining and washing was 45.7 percent, that in the extraction of petroleum and natural gas was 30.3 percent, and that in production and supply of electricity, gas and water went up by 17.5 percent and 87.6 percent growth for railway transportation. The year-on-year growth of investment in light industry was 41.2 percent. Of this total, the investment in manufacturing of foods was up by 65.1 percent, and in textile industry, 40.6 percent.

5. Sales on domestic markets were stable with the trend of picking up. In the first half of this year, the total retail sales of consumer goods reached 3,644.8 billion yuan, a year-on-year rise of 13.3 percent (it was 605.8 billion in June, up by 13.9 percent), or a real growth of 12.4 percent or 0.4 percentage point higher after deducting price factors. Of this total, the retail sales in urban areas reached 2,461.7 billion yuan, up by 14.0 percent, the retail sales at and below county level stood at 1,183.1 billion yuan, up by 12.0 percent. In terms of different sectors, the sales by wholesale and retail business was 3,082.1 billion yuan, up by 13.4 percent and that by lodging and catering industry was 492.9 billion yuan, up by 15.3 percent. Among the wholesale and retail business above the designated size, the year-on-year growth of the retail sales of telecommunication equipment was 25.5 percent, and that of petroleum and petroleum products was 38.4 percent and a 27.7 percent growth was registered for vehicles.

6. Market prices rose moderately. China registered a year-on-year rise of 1.3 percent in total consumer price level in the first half of this year (it was 1.5 percent growth in June), or 1 percentage point lower compared with the same period of last year. Prices rose by 1.3 percent in cities and 1.2 percent in rural areas. In terms of commodity categories, prices for food rose by 1.9 percent, that for housings up by 4.7 percent. Prices for medical care and personal utilities went up by 0.9 percent, and that of tobacco, liquor and related articles grew by 0.3 percent; that for household facilities, articles and services were up by 0.8 percent. Prices for recreation, education and culture articles and related services maintained unchanged. Prices for other categories of commodities had slight decline. In the first half of this year, the retail prices of commodities rose by 0.8 percent year-on-year. The producer’s price for manufactured goods rose by 2.7 percent (3.5 percent growth June). The purchaser’s price for raw materials, fuels and power rose by 6.1 percent (6.6 percent in June). The selling prices of housings in 70 large and medium-sized cities went up by 5.6 percent (5.8 percent growth in June), it was 3.3 percentage points lower than the growth in the same period last year.

7. High growth rate of exports dropped with imports speeding up. The total value of import and export for the first 6 months was US$ 795.7 billion, up 23.4 percent year-on-year, or 0.2 percentage points higher over the same period last year. Of the total, the value of export was US$ 428.6 billion, up by 25.2 percent or 7.5 percentage points lower than the same period of 2005, and the value of import was US$ 367.1 billion, up 21.3 percent or 7.3 percentage points higher. The trade surplus was US$ 61.4 billion. The total value of contracted foreign capital was US$ 88.5 billion, up by 2.7 percent; the actually utilized capitals were US$28.4 billion, down by 0.5 percent. By the end of June, China registered a total of US$ 941.1 billion in foreign exchange reserves, an increase of US$ 122.2 billion as compared with that at the beginning of this year.

8. Urban and rural residents' income kept fast growth. In the first half of this year, the per capita disposable income of urban residents was 5,997 yuan, a year-on-year growth of 10.2 percent in real terms after deducting price factors, or 0.7 percentage points higher than that in the same period last year. The per capita cash income of rural residents was 1,797 yuan, up by 11.9 percent year-on-year in real terms, or down by 0.6 percentage points.

Prominent problems existing in economic life are: it is even harder to increase the income of farmers; the investment in fixed assets is excessive; the supply of credit is over-scaled; influenced by prices hike of raw materials, fuels and power, the margin for profits of selected enterprises is restricted. Looking into the second half of this year, as long as we continue to earnestly implement various policies set by the central government, continue to strengthen and improve macro-regulatory controls, adopt target-oriented measures to tackle the prominent problems, such as the excessive investment in fixed assets, and actively push forward reform of economic system, speed up economic restructuring and change the pattern of economic growth, the national economic development for the whole year will maintain fast and stable growth.

(China Development Gateway July 18, 2006)