May 21, 1999
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| May 21, 1999 | atimes.com | |
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| China Growth of 8.2% forecast for '99 first half BEIJING - China is expecting an 8.2 percent economic growth rate for the first half of this year, with a GDP of 3.66 trillion yuan ($442 billion), the State Information Center says. In a report in the China Securities daily on May 19, the SIC said the prediction was based on an analysis of the government's macro-economic policies and general economic development trends. Primary industry, which includes agriculture, forestry, animal husbandry, fisheries and water conservation, will remain stable with 3.5 percent growth in the first half, according to the report. Industrial added value will increase by 9.7 percent to 940 billion yuan, light industry will grow by 9.5 percent and heavy industry by 9.9 percent, with faster growth than for last year. Greater fixed asset spending by the government will boost growth in the construction sector to 10 percent on an annual basis, analysts say. The service sector will have slow but continued growth, considering sluggish domestic consumer spending and a bearish stock market in the wake of the Asian financial crisis. For these reasons, economists predict 7.2 percent growth, more or less the same as for 1998. Fixed assets spending by the state will amount to 705.2 billion yuan for the January-June period, a 21 percent jump on a year-on-year base, the report says. The period will also see slow growth in foreign trade and a decline in the trade surplus. Economists predict that foreign trade will be worth $153.3 billion, with a trade surplus worth $15.5 billion - $7 billion dollars less than for the same period last year. The report says that market prices will continue to edge down, but that the large increase in fixed asset spending will gradually take effect, reversing the downward trend in prices. The retail price index is expected to drop by 2.8 percent for the period, while the consumer price index will be down 1.4 percent. The monetary policy will be important in the second quarter. In the first half of the year, M2, or broad money, will reach 11.2 trillion yuan, up 18.5 percent, and M1, or narrow money, will reach 3.884 trillion yuan, up 15 percent. The report suggests that the central government take steps to boost economic development such as continuing proactive financial and monetary policies and further interest cuts to find effective ways to increase exports and consumer spending. There will be lower economic growth in the second half and the government has been warned it should pay a great deal of attention to this. (Asia Pulse/XIC) | |||||||||
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