January 24, 2008

National Bureau of Statistics

In 2007, the national economy kept steady and fast growth with the features of rapid economic growth, optimized structure, increased efficiency and improved livelihood of the people.

According to preliminary estimation, the gross domestic product (GDP) for the year was 24,661.9 billion yuan, up by 11.4 percent, or 0.3 percentage point higher than that in the previous year, representing a fifth successive year of over 10 percent growth. In terms of growth by quarters, it was up 11.1 percent for the first quarter, 11.9 percent growth for the second, 11.5 percent for the third and 11.2 percent for the fourth. In terms of growth by sectors, the value added of the primary industry was 2,891.0 billion yuan, up by 3.7 percent, or 1.3 percentage points lower; that of the secondary industry was 12,138.1 billion yuan, up by 13.4 percent, or 0.4 percentage point higher; and that of the tertiary industry was 9,632.8 billion yuan, up by 11.4 percent, or 0.6 percentage point higher.

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

In 2007, the total output of grain reached 501.50 million tons, an increase of 3.5 million tons over the previous year, up by 0.7 percent. It was the fourth year of high production in the history, or the four consecutive years of increase for the first time since 1985. Of this total, the output of summer grain was 115.34 million tons, a year-on-year change of 1.3 percent; the output of early rice was 31.96 million tons, maintaining the same level as in the previous year; the output of autumn grain was 354.20 million tons, a year-on-year growth of 0.6 percent.

II. Industrial Production Increased Rapidly with Improved Economic Returns

In 2007, the value added of the industrial enterprises above the designated size was up by 18.5 percent (up by 17.4 percent in December), or 1.9 percentage points higher. Of this total, the growth increased by 13.8 percent for state-owned and state-holding enterprises, 11.5 percent growth for collective enterprises, 20.6 percent growth for share holding enterprises and 17.5 percent growth for enterprises by foreign investors and by investors from Hong Kong, Macao and Taiwan. The growth of the heavy industry was 19.6 percent and that of the light industry was 16.3 percent. The sales ratio was 98.1 percent for the industrial enterprises above the designated size.

In the first eleven months of 2007, the profits made by industrial enterprises above the designated size reached 2,295.1 billion yuan, which was 36.7 percent higher than that in the same period of last year, or 6.0 percentage points higher. All the 39 industrial divisions witnessed growth in profits. The growth went up by 68.7 percent for transport equipment manufacturing industry, 61.4 percent for special purpose machinery, 51.5 percent for chemical industry, 49.1 percent for coal industry, 47.2 percent for steel and iron industry and 39.0 percent for electricity industry.

III. Fast Growth Was Registered in Fixed Assets Investment with an Obvious Acceleration in Real Estate Development

In 2007, the total investment in fixed assets reached 13,723.9 billion yuan, a year-on-year growth of 24.8 percent, with an increase of 0.9 percentage points over the previous year. Of this total, the fixed assets investment in urban areas was 11,741.4 billion yuan, up by 25.8 percent, or 1.5 percentage points higher (1,680.9 billion yuan for December, up 19.6 percent); and that in rural areas was 1,982.5 billion yuan, up by 19.2 percent. The fixed assets investment in urban areas was composed of 146.6 billion yuan in the primary industry, a year-on-year increase of 31.1 percent, 5,102.0 billion yuan in the secondary industry, up 29.0 percent; and 6,492.8 billion yuan in the tertiary industry, up 23.2 percent. In terms of different areas, the investment in the eastern areas enjoyed a 21.0 percent growth, the growth in the central areas went up by 34.0 percent while that in western areas rose by 28.2 percent. The total investment in the real estate development for the year was 2,528 billion yuan, a growth of 30.2 percent, which was 8.4 percentage points higher than that in the previous year.

IV. Market Sales Increased Rapidly and Showed a Trend of Acceleration

In 2007, the total retail sales of consumer goods reached 8,921.0 billion yuan, a growth of 16.8 percent, and 3.1 percentage points higher than that in the previous year (901.5 billion yuan for December, up 20.2 percent). Of this total, the retail sales of consumer goods in cities stood at 6,041.1 billion yuan, up17.2 percent, or 2.9 percentage points higher while the retail sales at and below county level reached 2,879.9 billion yuan, up 15.8 percent, or 3.2 percentage points higher. In terms of different sectors, the growth of wholesale and retail sectors was 16.7 percent, and the growth of lodging and catering industry was 19.4 percent. The sales by wholesale and retail businesses above the designated size in the following sectors enjoyed over 20 percent growth: petroleum and petroleum products; automobiles; construction and decorating materials; communication equipment; furniture; household electric appliances and audio-video equipment; clothing, shoes, hats and textiles, cosmetics, and sports and recreation articles.

V. Consumer Prices Rose Rapidly and Housing Sale Prices Went up by a Large Margin

In 2007, the growth of CPI was 4.8 percent, which was 3.3 percentage points higher than that in the previous year ( 6.5 percent growth in December). The CPI went up by 4.5 percent in cities and up by 5.4 percent in rural areas. The increased prices for food and housing were the main factors to drive up the overall price level. In terms of categories, the prices for food went up by 12.3 percent, contributing 4.0 percentage points to the overall price increase; that of the housing rose by 4.5 percent, contributing another 0.6 percentage point. Of the prices for food, the price of grain went up by 6.3 percent; that of meat, poultry and related products rose by 31.7 percent; that of egg grew by 21.8 percent. Price rises and drops were seen for other commodities. In 2007, the retail prices rose by 3.8 percent (5.6 percent growth in December). The purchaser's prices for raw materials, fuels and power went up by 4.4 percent (8.1 percent growth in December). The producer's prices for manufactured goods rose by 3.1 percent (5.4 percent in December). The sale prices for housing in 70 large and medium-sized cities increased by 7.6 percent, up by 2.1 percentage points.

VI. Foreign Trade Increased Rapidly with Continued Increase of Foreign Direct Investment

The total volume of imports and exports for the whole year reached US$2,173.8 billion, a growth of 23.5 percent, which was 0.3 percentage point lower. The value of exports was US$1,218 billion, up 25.7 percent, or 1.5 percentage points lower; and the value of imports was US$955.8 billion, up 20.8 percent, which was 0.8 percentage point higher. China had a trade surplus of 262.2 billion US dollars, an increase of US$84.7 billion over that in the year of 2006. The foreign direct investment from non-financial institutions actually used in 2007 was US$74.8 billion, an increase of 13.6 percent. The year-end foreign exchange reserves of China reached US$1.53 trillion, up by 43.3 percent over the previous year.

VII. Income and Employment Increased Rapidly

In 2007, the per capita disposable income of urban population was 13,786 yuan, a growth of 17.2 percent, or a real growth of 12.2 percent, which was 1.8 percentage points higher over that in the previous year. The per capita net income of rural population was 4,140 yuan, a growth of 15.4 percent, or a real growth of 9.5 percent which was 2.1 percentage points higher over that in the year 2006. By the end of 2007, the balance of savings deposits of households amounted to 17,253.4 billion yuan, an increase of 1,096.7 billion yuan as compared with that at the beginning of the year. The new employment in urban areas for the whole year was 12.04 million people, an additional increase of 200,000 people over the increase in the previous year. The registered urban unemployment rate at the end of 2007 was 4.0 percent, which was 0.1 percentage point lower than that at the end of the previous year.

VIII. Money Supply Grew Rapidly with Continued Growth in Credits

At the end of December, the broad money (M2) was 40.3 trillion yuan, an annual growth of 16.7 percent, which was 0.2 percentage points lower. The narrow money (M1) was 15.3 trillion yuan, a rise of 21.0 percent, or 3.5 percentage points higher. The cash in circulation (M0) was 3,033.4 billion yuan, up by 12.1 percent, or down by 0.6 percentage point. Outstanding loans of all financial institutions stood at 3,632.3 billion yuan at the end of the year, an increase of 448.2 billion yuan as compared with that at the beginning of this year. Outstanding deposits with all financial institutions reached 5,387.8 billion yuan at the end of the year, an increase of 459.9 billion yuan over that at the beginning of this year. The total cash supply for the whole year was 326.2 billion yuan, an additional increase of 22.1 billion yuan over that in the previous year.

The outstanding problems existing in the current economic performance include: the risk of the economy shifting from rapid to overheating still exists, the pressure of price rises is increasing, structural problems are prominent, the economy develops by extensive means, and institutional and mechanical constraints are yet to solve. In the new year,, we should adhere to the strategic plan and general requirement made by the 17th CPC Congress and the Central Economic Working Conference, follow the guideline of controlling the aggregates, stabilizing the prices, adjusting the structure and enhancing the balance, implement the prudent fiscal policies and tight monetary policies, accelerate the change of economic growth pattern, make efforts in structural adjustment, promote reform and opening-up and strive for a sound and fast economic development.

(China Development Gateway January 24, 2008)