National Bureau of Statistics

January 25, 2007

In 2006, the national economy maintained steady and fast growth. The Central Party Committee and the State Council adopted a series of macro-economic control policies and measures in a timely manner to target the outstanding problems, which emerged in economic development. These policies and measures proved to be effective and helped the economic development avoid moving from speedy growth to over-heating. The economic and social development made a good start for the implementation of the 11th Five-Year Plan.

According to preliminary estimation, the gross domestic product (GDP) for the year was 20,940.7 billion yuan, up by 10.7 percent at comparable prices, which is 0.3 percentage point higher than that in the previous year. Of this total, the value added of the primary industry was 2,470.0 billion yuan, up by 5.0 percent; that of the secondary industry was 10,200.4 billion yuan, up by 12.5 percent; and that of the tertiary industry was 8,270.3 billion yuan, up by 10.3 percent. In terms of the four different quarters, the GDP growth was 10.4 percent, 11.5 percent, 10.6 percent and 10.4 percent respectively.

1. Agricultural Production Kept a Steady Growth with a Bumper Grain Harvest.

In 2006, the total output of grain surpassed 490 million tons. The output of cotton was 6.73 million tons, up by 17.8 percent over the previous year. Despite the influence of epidemic diseases, the animal and husbandry industry kept fast growth. The total outputs of meat and eggs were expected to reach 80 million tons and 29.5 million tons, up by 4.5 percent and 3.0 percent respectively over the previous year.

2. Industrial Production Increased Rapidly with Improved Economic Returns.

In 2006, the value added of industrial sector was up by 12.5 percent over the previous year. Of this total, the value added of the industrial enterprises above the designated size was up by 16.6 percent (up by 14.7 percent in December), of which the growth of the heavy industry increased by 17.9 percent and 13.8 percent growth for light industry. The sales ratio was 98.1 percent for the industrial enterprises above the designated size. In 2006, the amount of profits made by those enterprises was 1,878.4 billion yuan, an increase of 31.0 percent.

3. Fast Growth Was Registered in Fixed Assets Investment with the Drop of Growth Rate.

In 2006, the total investment in fixed assets reached 10,987.0 billion yuan, a year-on-year growth of 24.0 percent, with a drop of 2.0 percentage points over the previous year. Of this total, the fixed assets investment in urban areas was 9,347.2 billion yuan, up by 24.5 percent, a drop of 2.7 percentage points (1,416.0 billion yuan for December, up 13.8 percent), and that in rural areas was up by 21.3 percent. Of the fixed assets investment in urban areas, the Central Areas enjoyed a 33.1 percent growth, which was 0.4 percentage point higher while the growth rates in Eastern and Western Areas dropped by 3.4 and 4.7 percentage points, or the year-on-year growth was 20.6 percent and 25.9 percent respectively. The total investment in the real estate development for the year was 1,938.2 billion yuan, a year-on-year growth of 21.8 percent, which was 0.9 percentage point higher than that in the previous year.

4. Domestic Market Sales Was Brisk with an Accelerated Growth Rate.

In 2006, the total retail sales of consumer goods reached 7,641.0 billion yuan, a year-on-year growth of 13.7 percent, 0.8 percentage point higher than that in the previous year (749.9 billion yuan for December, up 14.6 percent). Of this total, the retail sales of consumer goods in urban areas increased by 14.3 percent, and the retail sales in rural areas went up by 12.6 percent. The growth of wholesale and retail sector was 13.7 percent, and the growth of lodging and catering industry was 16.4 percent. Of the sales by wholesale and retail businesses above the designated size, the sales of petroleum and petroleum products increased by 36.2 percent, that of automobiles up by 26.3 percent, that of construction and decorating materials up by 24.0 percent and 22.0 percent growth for communication equipment.

5. Foreign Trade Kept a Fast Growth with Increase of Foreign Direct Investment.

The total volume of imports and exports for the whole year reached 1,760.7 billion US dollars, a year-on-year growth of 23.8 percent, which was 0.6 percentage point higher. Of this total, the value of exports was 969.1 billion US dollars, up 27.2 percent; and the value of the imports was 791.6 billion US dollars, up 20.0 percent. China had a trade surplus of 177.5 billion US dollars, an increase of 75.5 billion US dollars over that in the year 2005. The foreign direct investment actually used in 2006 was 63.0 billion US dollars, an increase of 4.5 percent. The year-end foreign exchange reserves of China reached 1,066.3 billion US dollars, an increase of 247.3 billion US dollars as compared with that at the beginning of the year.

6. The General Level of Prices Was Stable While the Growth Rate of Housing Prices Was High.

In 2006, the year-on-year growth of CPI was 1.5 percent, or 0.3 percentage point lower (2.8 percent for December). Of which, CPI in either urban or rural areas was up by 1.5 percent. In terms of the structural components, the year-on-year growth of prices for consumer goods was 1.4 percent, and that of the service items was 1.8 percent. In terms of goods categories, the prices of food were up by 2.3 percent year-on-year, of which the prices of grain were up 2.7 percent. Price rises and drops were seen for other commodities. The retail prices of commodities for the whole year were up by 1.0 percent year-on-year, or 0.2 percentage point higher (up 2.4 percent in December). The purchasing prices of raw material, fuel and power grew by 6.0 percent year-on-year, down by 2.3 percentage points (5.0 percent growth in December), the producer’s prices of manufactured goods increased by 3.0 percent, down by 1.9 percentage points (3.1 percent in December), and the prices for investment in fixed assets rose by 1.5 percent, down by 0.1 percentage point. The sale prices for housing in 70 large and medium-sized cities increased by 5.5 percent year-on-year, down by 2.1 percentage points.

7. Income of Urban and Rural Households Speeded up and Employment Recorded a Big Increase.

In 2006, the per capita disposable income of urban population was 11,759 yuan, a year-on-year growth of 12.1 percent, or a real growth of 10.4 percent which was 0.8 percentage point higher over that in the previous year. The per capita net income of rural population was 3,587 yuan, a year-on-year growth of 10.2 percent, or a real growth of 7.4 percent which was 1.2 percentage points higher over that in the year 2005. By the end of 2006, the balance of savings deposits of households amounted to 16,158.7 billion yuan, an increase of 2,054.4 billion yuan as compared with that at the beginning of the year. The new employment in urban areas for the whole year was 11.84 million people. The registered urban unemployment rate by the end of 2006 was 4.1 percent, which was 0.1 percentage point lower than that by the end of the previous year.

The above facts show that the national economic performance in the year 2006 maintained the momentum of “comparatively fast growth, better economic returns, low growth rate of prices and more benefits to the people”, demonstrating enhanced balances between the economic and social developments. The outstanding problems existing in the current economic performance include: agriculture still has a weak basis which leads to increased difficulties in the steady growth of grain production and in the continued growth of farmer income; outstanding problems still exist with the irrational relationship between investment and consumption, the imbalance of payments and excess liquidity in banking system; and the arduous tasks still remain in energy saving, reduction of material inputs and reduction of pollutant emissions.

Looking into the year 2007, the favorable factors will take a conducive role in the economic development though there are uncertainties in world economic performance and some problems with the domestic economy. As long as we adhere to the scientific concept of development for the guidance of economic and social development and seriously implement the spirit of the Central Economic Working Conference and all the measures, the national economy in 2007 will maintain its steady and comparatively fast development.

(China Development Gateway January 25, 2007)