National Bureau of Statistics

October 25, 2007

In 2007, the Central Government adopted a series of macro-control policies timely manner targeting the outstanding conflicts and problems existing in economic development. The national economy kept steady and fast growth, featured as: rapid economic growth, optimized structure, increased efficiency and improved livelihood of the people. The effect of macro-control policies is releasing.

According to preliminary estimation, the gross domestic product (GDP) of China in the first three quarters of this year was 16,604.3 billion yuan, a year-on-year increase of 11.5 percent, which was 0.7 percentage point higher. The first quarter GDP growth was 11.1 percent; that for the second quarter was 11.9 percent and 11.5 percent growth for the third quarter. In terms of different industries, the value added of the primary industry was 1,820.7 billion yuan, up by 4.3 percent or 0.6 percentage point lower; the value added of the secondary industry was 8,347.8 billion yuan, up by 13.5 percent or 0.2 percentage point higher; and the value added of the tertiary industry was 6,435.8 billion yuan, up by 11.0 percent or an increase of 1.5 percentage points.

1. Agricultural production kept steady growth, another bumper harvest was expected for grain production. The total output of summer grain reached 115.34 million tons, an increase of 1.45 million tons or an increase of 1.3 percent. The output of early rice was 31.96 million tons, maintaining the same level as compared with that in the previous year. Another increase is expected for the output of autumn grain and, therefore, the output of grain will register a fourth year of bumper harvest. With the implementation of various policies, the production of pig was recovering, and the total output of meat, beef, mutton and poultry continued to grow.

2. Industrial production accelerated its growth with a big margin of profits made by enterprises. In the first three quarters of this year, the total value added of industrial enterprises above designated size was up 18.5 percent year-on-year growth (18.9 percent in September), or 1.3 percentage points higher than the corresponding period of 2006. Of this total, the value added of state-owned and state-holding enterprises went up by 14.1 percent; that of the collective enterprises went up by 11.7 percent; that of the share-holding enterprises grew by 20.4 percent and 17.4 percent growth for enterprises funded by investments from foreign businesses and from HK SAR, Macao SAR and Taiwan province. The growth of the heavy industry was 19.6 percent, and that of the light industry was 16.1 percent. Among the 39 industrial divisions, the fast growth industries were mainly petroleum processing, electrical machinery, steel and iron, transport equipment, electric power, building materials, chemical industry, medicine, chemical fiber, beverage and textile industry. Industries which witnessed drop were non-ferrous metal industry, processing of agriculture products and non-staple products, communication equipment, mining and processing of nonmetal ores, paper making and extraction of petroleum.

In the first eight months of this year, the net profits made by industrial enterprises above designated size stood at 1,562.3 billion yuan, a year-on-year increase of 37.0 percent. Of this total, the amount of net profits of the state-owned and state-holding enterprises went up by 31.0 percent, that of the collective enterprises increased by 26.3 percent, that of the share-holding enterprises grew by 34.5 percent and 35.4 percent growth for enterprises funded by investments from foreign businesses and from HK SAR, Macao SAR and Taiwan province. The profits made by private enterprises went up by 48.5 percent. Thirty-eight out of the thirty-nine industrial divisions registered an increase in profits; and the following industries scored the fast growth: 120 percent for chemical fiber, 64 percent for building materials and 62.8 percent for special purpose machinery. The profits made by extraction of petroleum and natural gas declined by 16.2 percent.

3. Investment in fixed assets was running at high level and the growth rate declined to some extent. In the first three quarters of this year, the investment in fixed assets of the country was 9,152.9 billion yuan, up by 25.7 percent, or a drop of 1.6 percentage points as compared with the growth in the same period last year. In terms of different areas, the investment in urban areas reached 7,824.7 billion yuan, up by 26.4 percent (24.8 percent in September), a drop of 1.8 percentage points year-on-year; that in rural areas was 1,328.2 billion yuan, up by 21.2 percent. Of the total investment in urban areas, the investment in the primary industry was 93.8 billion yuan, a year-on-year increase of 41.1 percent; the investment in the secondary industry was 3,452.2 billion yuan, up by 29.3 percent and the investment in the tertiary industry was 4,278.7 billion yuan, up by 24.0 percent. The investment in eastern areas was 4,017.2 billion yuan, a year-on-year increase of 21.4 percent; that in central areas was 1,933.1 billion yuan, up by 36.2 percent and that in the western areas was 1,753.9 billion yuan, up by 29.6 percent. The investment in state-owned and state holding enterprises was 3,395.1 billion yuan, up by 16.2 percent. The investment in real estate was 1,681.4 billion yuan, up by 30.3 percent. In the first three quarters of this year, there were 170,123 newly started projects, which were 18,151 more than that in the same period of last year. The planned investment in new projects was 6,030.9 billion yuan, a year-on-year increase of 24.2 percent.

4. Sales on domestic markets accelerated rapidly and consumer prices continued to rise. In the first three quarters of this year, the total retail sales of consumer goods reached 6,382.7 billion yuan, a year-on-year rise of 15.9 percent (up by 17.0 percent in September), which was 2.4 percentage points higher than that in the same period of last year. In terms of different areas, that in cities reached 4,333.1 billion yuan, up by 16.3 percent, and the retail sales at and below county level stood at 2,049.6 billion yuan, up by 14.9 percent. In terms of different sectors, the sales by wholesale and retail sector, and lodging and catering sector was up by 15.8 percent and 18.2 percent respectively, and the other sectors by 4.6 percent.

In the first three quarters of this year, the year-on-year consumer prices grew by 4.1 percent (year-on-year growth in September was 6.2 percent, or 0.3 percent growth over that in August). The new factors contributed 2.2 percentage points to the prices rise, and the lagging effect contributed 1.9 percentage points. In terms of commodity categories, prices for food increased rapidly. In the first three quarters of this year, the year-on-year growth of prices for food went up by 10.6 percent, of which grain went up by 6.3 percent, eggs by 26.2 percent, and meat, poultry and related products up by 29.1 percent. Prices for aquatic products rose by 4.6 percent, fresh vegetable up 3.0 percent, and 3.3 percent decrease for fresh fruits. Prices for other categories of commodities either had slight drop or rise. For instance, prices for tobacco, liquor and articles up by 1.7 percent, household facilities, articles and services up by 2.0 percent, health care and personal articles up by 1.8 percent, housing up by 4.1 percent; prices for transportation and communication down by 0.7 percent, recreation, education and culture articles down by 1.1 percent and 0.3 percent drop for clothing. In the first three quarters of this year, the retail prices of commodities rose by 3.2 percent year on year (a 4.9 percent growth in September). The producer's prices for manufactured goods rose by 2.7 percent (2.7 percent growth in September). The purchaser's prices for raw material, fuel and power rose by 3.8 percent (by 3.6 percent in September).

5. Foreign trade kept rapid growth and trade surplus continued to grow. In the first three quarters of this year, the total value of imports and exports was US$1,570.8 billion, up 23.5 percent year-on-year, or 0.8 percentage point lower as compared with that in the same period of last year. Of the total, the value of exports was US$878.2 billion, up by 27.1 percent, or 0.6 percentage points higher; and the value of imports was US$692.6 billion, up 19.1 percent, a decline of 2.6 percentage points. The trade surplus was US$185.7 billion, an increase of US$75.8 billion. In the first three quarters of this year, the total value of foreign direct investment actually utilized was US$47.2 billion, a year-on-year growth of 10.9 percent, whereas it was 1.5 percent drop in 2006. At the end of September, China registered a total of US$1,433.6 billion in foreign exchange reserves, an increase of 45.1 percent over the same period of last year.

6. Urban and rural residents' income increased by a large margin with more material benefits. In the first three quarters of this year, the per capita disposable income of urban residents was 10,346 yuan, a real growth of 13.2 percent year-on-year, or 3.2 percentage points higher than that in the same period last year. The per capita cash income of rural residents was 3,321 yuan, a year-on-year growth of 14.8 percent in real terms, an increase of 3.4 percentage points.

By the end of September, the newly increased employment in urban areas reached 9.20 million people, accomplishing the target of 9 million set for the whole year. By the end of September, some 22.38 million urban residents received the minimum living allowances. About 27.81 million rural residents received the minimum living allowance.

7. Growth of money supply was still fast and the excessive liquidity was still outstanding. By the end of September, the broad money (M2) was 39.3 trillion yuan, a year-on-year growth of 18.5 percent, which was 1.5 percentage points lower than that at the end of previous year. The narrow money (M1) was 14.3 trillion yuan, a year-on-year rise of 22.1 percent, which was 4.6 percentage points higher. The cash in circulation (M0) was 2,903.1 billion yuan, up by 13.0 percent, or 0.4 percentage point higher year-on-year. By the end of September, the outstanding loans of all financial institutions increased by 3,360.2 billion yuan as compared with that at beginning of this year, or an increase of 642.2 billion yuan as compared with the same period of last year. The outstanding deposits of all financial institutions grew by 4,748.8 billion yuan over that at the beginning of this year, or 589.3 billion yuan more than that a year ago. In the first three quarters of this year, the net injection of money was 195.8 billion yuan, an increase of 30.2 billion yuan over the same period of last year.

The institutional, systematic and structural problems existed in economic performance are still outstanding and these problems included, rapid economic growth, prices rise, the high pressure on energy consumption and pollutant emission reduction, and the uncertainty of world economic growth. In the following period, we will fully implement the spirits of the 17th CPC congress, and adhere to the scientific approach to development to guide the economic and social development. We will further enhance and improve the macro-control, and put emphasis on transformation of the mode of economic development and proceed with reform and opening-up and independent innovation which will promote the realization of a sound and rapid growth of the national economy.

(China Development Gateway October 25, 2007)