National Bureau of Statistics

October 20, 2008

In the first three quarters of 2008, faced with the sequential severe natural disasters and the negative impacts brought about by the world economic and financial turmoil, the central government took stock of the situation, made decisions resolutely and adopted an array of macro-control policies. As a result, the national economy kept a steady and fast growth with a good overall situation.

According to preliminary estimation, the gross domestic product (GDP) of China in the first three quarters of this year was 20,163.1 billion yuan, a year-on-year increase of 9.9 percent, which was 2.3 percentage points lower than that in the same period last year. The value added of the primary industry was 2,180.0 billion yuan, up by 4.5 percent, or 0.2 percentage point higher; that of the secondary industry was 10,111.7 billion yuan, up by 10.5 percent, or 3.0 percentage points lower; and that of the tertiary industry was 7,871.4 billion yuan, up by 10.3 percent, down by 2.4 percentage points.

1. The situation of agricultural production was good with increase in grain output for five consecutive years. According to preliminary estimation, the total output of summer grain was 120.41 million tons, a year-on-year growth of 2.6 percent; the output of early rice was 31.58 million tons, a slight increase of 62,000 tons over that in the previous year. Due to the increased planting area and improved unit production, a bumper harvest of the autumn grain was a foregone situation. The total output of grain was expected to hit a historic high, leading to a fifth successive year of increase. The output of cotton and meat maintained the same level, the output of oil-bearing seeds increased with recovery nature, that of the meat continued to grow, and the production of pigs made a quick recovery. In the first three quarters of this year, the number of slaughtered pigs grew by 5.8 percent while the total stocks of pigs rose by 6.6 percent.

2. The growth rate of industrial production slowed down while a steady increase of profits was made by enterprises. In the first three quarters of this year, the total value added of the industrial enterprises above designated size was up 15.2 percent year-on-year (growth in September was 11.4 percent), or 3.3 percentage points lower than that in the same period of 2007. Analysis on different types of enterprises showed that the value added growth of the state-owned and state holding enterprises went up by 11.8 percent; collective enterprises, 9.6 percent; share-holding enterprises, 17.5 percent; and 12.7 percent growth for enterprises funded by foreign investors or investors from Hong Kong , Macao and Taiwan province. The year-on-year growth of heavy industry was 16.0 percent, and 13.1 percent for the light industry. In terms of different areas, the growth in eastern, central and western regions went up by 13.6 percent, 19.2 percent and 17.1 percent respectively. The production and market of industrial products went on well. In the first three quarters of this year, the sales ratio of industrial products was 97.8 percent, which maintained almost the same level over that in the previous year.

In the first eight months of this year, the profits made by industrial enterprises above designated size stood at 1,868.5 billion yuan, a year-on-year increase of 19.4 percent. Among the 39 industrial divisions, 34 divisions registered year-on-year growth with profits. The top five divisions of profits were petroleum and natural gas exploitation; smelting and pressing of ferrous metals; mining and washing of coal; manufacturing of raw chemical materials and chemical products; and manufacturing of transportation equipment.

3. Investment in fixed assets enjoyed steady growth with improved investment structure. In the first three quarters of this year, the investment in fixed assets of the country was 11,624.6 billion yuan, a year-on-year growth of 27.0 percent, or a rise of 1.3 percentage points as compared with the growth in the same period last year. The investment in urban areas reached 9,987.1 billion yuan, up by 27.6 percent (29.0 percent growth in September), or 1.2 percentage points higher while that in rural areas was 1,637.5 billion yuan, up by 23.3 percent, or a rise of 2.1 percentage points. The investment in the primary industry, secondary industry and the tertiary industry in urban areas went up by 62.8 percent, 30.2 percent and 24.8 percent respectively; of which, the year-on-year growth of investment in the primary industry was 21.7 percentage points higher. The investment in eastern, central and western regions grew by 22.7 percent, 35.4 percent and 29.5 percent respectively. The growth of investment in central and western regions was apparently faster than that in eastern region.

4. Sales on domestic markets continued to accelerate with a rapid growth in both urban and rural areas. In the first three quarters, the total retail sales of consumer goods reached 7,788.6 billion yuan, a year-on-year rise of 22.0 percent (up by 23.2 percent in September) which was 6.1 percentage points higher than that in the same period last year. The retail sales in urban areas reached 5,316.5 billion yuan, up by 22.7 percent, and the retail sales at and below county level stood at 2,472.1 billion yuan, up by 20.6 percent. Grouped by different sectors, the sales by wholesale and retail businesses was 6,557.3 billion yuan, up by 22.0 percent and that by lodging and catering industry was 1,105.5 billion yuan, up by 24.8 percent.

5. The growth rate of consumer prices continued to slow down while that of the producers' prices for manufactured goods showed correction. In the first three quarters of this year, the consumer price index went up by 7.0 percent (4.6 percent growth in September and its month-on-month change down by 0.3 percentage point), 2.9 percentage points higher than that in the same period last year, and was, however, 0.9 percentage point lower than that in the first half of this year. The price rose by 6.7 percent in cities and 7.7 percent in rural areas. Grouped by commodity categories, prices for food rose by 17.3 percent, and prices for housing were up by 7.0 percent. Prices for other categories of commodities witnessed slight rises or drops. In the first three quarters of this year, the retail prices of commodities rose by 6.9 percent year on year (a 5.3 percent growth in September), or 3.7 percentage points higher than that in the same period last year. The producers' prices for manufactured goods rose by 8.3 percent (9.1 percent growth in September, or 1.0 percentage point lower over the previous month), which was 5.6 percentage points higher year on year. The purchaser's prices for raw material, fuel and power rose by 12.4 percent (by 14.0 percent in September), or 8.6 percentage points higher than that in the same period last year. The year-on-year growth of the prices for housing in 70 large and medium-sized cities went up by 8.5 percent (3.5 percent up in September), or 1.8 percentage points higher year on year.

6. The growth rate of export dropped to some extent and foreign direct investment increased by a large margin. The total value of imports and exports for the first three quarters was US$1,967.1 billion, up 25.2 percent year-on-year, which was 1.7 percentage points higher than that in the same period last year. The value of exports was US$1,074.1 billion, up by 22.3 percent, a drop of 4.8 percentage points, and the value of imports was US$893.1 billion, up 29.0 percent, a rise of 9.9 percentage points. The trade surplus was US$181.0 billion, a decline of US$4.7 billion over the same period last year. In the first three quarters of this year, the total value of foreign direct investment actually utilized was US$74.4 billion, a year-on-year growth of 39.9 percent, or 29.0 percentage points higher than that in the same period last year.

7. New jobs increased in urban areas and the income of urban and rural residents continued to grow. In the first eight months of this year, the total newly increased employment in urban areas was 8.48 million people, the re-employment of laid offs was 3.70 million, and another 1.04 million people who had difficulties in finding jobs were employed. In the first three quarters, the per capita disposable income of urban population was 11865 yuan, a year-on-year growth of 14.7 percent, the real growth was 7.5 percent after deducting price factors. The per capita cash income of rural population was 3,971 yuan, up by 19.6 percent year-on-year, or 11.0 percent growth in real term.

8. The growth rate of money supply and credit dropped while the newly increased savings deposits went up by a large margin. By the end of September, the broad money (M2) was 45.3 trillion yuan, a year-on-year growth of 15.3 percent, which was 3.2 percentage points lower. The narrow money (M1) was 15.6 trillion yuan, a rise of 9.4 percent, or 12.6 percentage points lower. The cash in circulation (M0) was 3,172.5 billion yuan, up by 9.3 percent or 3.7 percentage points lower. The amount of outstanding loans of all financial institutions was 29,647.7 billion yuan, increased by 3,480.3 billion yuan over that at the beginning of this year, or an increase of 120.1 billion yuan as compared with the same period last year. The amount of outstanding deposits of all financial institutions was 45,494.2 billion yuan, an increase of 6,560.1 billion yuan over the beginning of the year, or 1,811.3 billion yuan more than the same period last year. In the first three quarters of this year, the net supply of currency was 135.0 billion yuan, a drop of 60.8 billion yuan over that a year ago.

The notable contradictions and problems existing in current economic performance are: the international financial market is turbulent and changeable, the growth rate of world economy slows down noticeably, there are more uncertain and volatile factors in international economic climate, and all these factors start to release their negative impacts on China's economy. In the coming period, we should thoroughly apply the scientific outlook on development; adopt flexible and prudent macro policies on the basis of the decisions made by the central government on economic work; further enhance the foresight, relevance and flexibility of the macro control; promote a steady and rapid economic growth; maintain the stability of domestic economy and financial market and make our efforts to promote a sound and fast growth of the national economy.

(China Development Gateway October 21, 2008)