The Chinese economy rose by 11.5 percent in the first half of
2007, continuing on a "sound and rapid" path which needs some "adjustment",
officials and researchers said yesterday.
The gross domestic product
(GDP) hit 10.68 trillion yuan ($1.39 trillion) in the first six months, growing
0.5 percentage points higher than a year ago, the National Bureau of Statistics
(NBS) said in its quarterly release.
The GDP is expanding much faster
than the year's target of around 8 percent, largely because industrial and
taxation policies had spurred economic growth; and economies elsewhere in the
world grew faster than expected at the onset of 2007, bureau spokesman Li
Xiaochao said.
"We are keeping a close watch on what direction (China's)
accelerated economic growth is taking," Li told a press conference. "But whether
or not the economy is overheated is a complex issue that should be viewed from
different angles."
The consumer price index (CPI), a major gauge of
inflation, went up to 4.4 percent in June - a 28-month high - and 3.2 percent in
the first half. But the rise of core CPI, after deducting food and energy
prices, rose only 0.9 percent in the first half, he said. Price hikes of
foodstuffs, mainly grain, meat and fowl and eggs, contributed significantly to
the rise of CPI, said Li. Food makes up a third of the CPI basket.
Lin
Yueqin, an expert on macro-economy at the Chinese Academy of Social Sciences,
said he believes the growth rate will be maintained for the full year.
"The country needs high growth to address such issues as
unemployment," Lin said. "The crucial point is that development should consider
energy and environment constraints and be based on an optimized structure."
For example, local governments should refrain from recklessly pursuing
GDP growth by investing in sectors that guzzle energy and spew out pollution, he
said.
The tertiary industry, where investment has been far less than in
primary and secondary industries, should be further boosted, Lin said.
Li conceded that systematic and the structural problems still exist in
the economy.
He said the country will strengthen macro controls, make
efforts to adjust the economic structure, change the pattern of economic growth
and deepen reform which will lead to the realization of sound and rapid growth.
The spokesman declined to say if the economic acceleration would
increase the likelihood of the central bank raising interest rates again. He
said it would be up to the banking authorities to decide.
The
People's Bank of China has raised the benchmark interest rate twice and has
ordered lenders to set aside more reserves five times this year.
Li said
economic growth, which used to rely on investment as well as exports, has seen
some changes since the beginning of this year, when consumption, previously the
weakest engine, is increasingly driving the boom.
In the January-June
period, retail sales hit a decade high to grow by 15.4 percent year on year, 2.1
percentage points more than in the same period last year.
In contrast,
exports grew no faster than last year, and investment in fixed assets such as
factories and properties dropped by 3.9 percentage points in the same period to
reach 25.9 percent, according to the bureau statistics.
"The changes in
domestic demand are what we were expecting," Li said, attributing higher
consumption to income rises and increased spending on automobiles and housing.
He downplayed media reports that suggest the country may overtake
Germany to become the world's third largest economy by the end of the year.
Estimates of aggregate GDP vary depending on the exchange rates used and
how China's growth is forecast, Li said.
"But one thing is certain: We
are drawing nearer to Germany and the gap is becoming smaller."
According to the World Bank, German economy was valued at $2.9 trillion
at the end of 2006.
(China Daily 07/20/2007 page 1)
Questions:
1. Why is the GDP expanding
faster than expected?
2. What suggestion for local governments does Lin Yueqin give?
3. What is the driving force behind the economic boom?
Answers:
1. Industrial and taxation policies have
spurred economic growth.
2. Local Governments should refrain from recklessly pursuing GDP growth by
investing in sectors that guzzle energy and spew out pollution.
3. Consumption, because of increased income and increased spending on
automobiles and housing.
（英語點津 Linda 編輯）
About the broadcaster:
Suzann Riddle is a senior double majoring in Health Care
Management and Economics at Appalachian State University in Boone, NC. She finds
herself at China Daily Website after visiting many areas of China as a Holland
Fellow, Appalachian's international exchange program with Fudan University.
Suzann Riddle is a senior double majoring in Health Care
Management and Economics at Appalachian State University in Boone, NC. She finds
herself at China Daily Website after visiting many areas of China as a Holland
Fellow, Appalachian's international exchange program with Fudan University.
