In May, fixed investment and industrial output slowed down. The market kept stable and got brisker. Foreign trade turned into surplus from deficit. There was less momentum of price hikes in the market. And bank credit showed signs of contraction. All of these indicate China's economy was still in a fast lane and the macro-control showed more effects for this month. This is unveiled by the report of National Statistics Bureau on the national economy in May.

Industrial production further dropped

The industries above the scale produced added value of 431 billion yuan in May, up 17.5 percent over the same period of last year and 1.6 percentage points less than that in April. The highest growth happened in enterprises funded by investors from Hong Kong, Macao and Taiwan, as well as foreign countries. They were followed by joint-stock businesses and state-owned or state-holding ones.

Output of heavy industry increased by 18.9 percent and fell 2.5 percentage points while the figures for the light industry were 16 percent and 0.6 percentage points respectively. Two digital growth was seen in raw coal, crude oil, natural gas, power generation, micro-computers, mobile and autos. The export delivery was worth 288.2 billion yuan, 34.1 percent more than the same month of last year.

From January to May this year, the industries above the average scale contributed 2003.7 billion yuan worth of added value, 18.1 percent higher than the same period of last year. Most was from state-owned or state-holding enterprises with 877 billion yuan at a growth of 14.7 percent. But the most robust growth, 22 percent, was from Hong Kong, Marco, Taiwan or foreign funded companies, with 562.2 billion yuan.

Fix assets investment fell back faster

In May, 439 billion yuan was invested in urban areas, up 18.3 percent on the basis of the same period of last year. With the speed 16.4 percentage points slower than that in the previous month, there was an extra decline of 7.6 percentage points on the basis of April. Real estate sector absorbed 101.7 billion yuan, a rise of 25.5 percent.

Fixed assets investment reached 1543.7 billion yuan for the first five months of the year, climbing 34.8 percent but 8 percentage points down from the first fourth months. 925.7 billion yuan worth of investment was made by state-owned or state-holding enterprises, an increase of 33.3 percent.

The fastest pace of growth was seen in retailing and wholesaling and manufacturing sectors, at 54.8 and 51.3 percent respectively. The construction industry, soaring by 47.2 percent, plunged most sharply with 28 percentage points while power, gas and water supply, which went up at approximately the same speed as the construction did, only declined slightly by 0.5 percentage points.

The western areas led the race of investment, followed by the central and eastern areas. But the gap between them was not wide very much.

The market was stable and got brisker

The rising prices and relatively low base of last year pushed the consumer goods retailing sales up by 17.8 percent, 4.6 percentage points faster than April. The sales stood at 416.6 billion yuan in May. The most remarkable upward movement took place in the catering sector, at 47.2 percent. Sales in urban areas were twice as much as that in counties or areas under counties both in terms of total amount and the growth rate.

From January to May, sales of consumer goods registered about 21000 billion yuan, 12.5 percent higher than the same period of last year.

Exports outran imports in May

The imports and exports totaled 87.6 billion yuan in May, an increase of 34.1 percent, 3.5 percentage points behind the previous month. The 44.9 billion USD worth of exports sped up 0.4 percentage points and scored a rise of 32.8 percent. The imports, 42.8 billion USD, slowed down by 7.4 percentage points but it still went up 35.4 percent. The result was a surplus of 2.1 billion USD, compared with the deficit in the first four months in a row.

But there was still a trade deficit of 8.7 billion USD for the first five months of the year.

Consumer prices

In May CPI was 0.1 percent down from the previous month but were still gathering the rising momentum, albeit slightly. Compared with the same month of last year, consumer prices upswing 4.4 percent. Price hikes for food, especially the grain, was the main driving force.

Fiscal expenditure remarkably slowed down the bulging.

172.1 billion yuan was spent in May, only 1.9 percent higher than the same month of last year. This was mainly due to the 15.4 percent decrease in infrastructure bill.

Revenue exceeded expenditure by 45.3 billion yuan, 37.2 billion yuan more than the same month of last year.

From January to May this year, the revenue, 1197.3 billion yuan, inflated 32.4 percent while the expenditure, 832.3 billion yuan, upturned 13.8 percent.

Bank credit began to shrink

By the end of May, broad money (M2) posted at about 24 trillion yuan and narrow money (M1) stood at about 8.7 trillion yuan, rising 17.5 percent and 18.6 percent over the same month of last year. Currency in circulation (M0) amounted to 1.9 trillion yuan, up 11.3 percent. 83 billlion yuan was withdrawn from circulation, 50.4 billion yuan more than the same month of last year. Measures reigning in money supply began to take effect.

In May another 262 billion yuan was put into financial institutions as deposits. The increase was 171.1 billion yuan less than the same month of last year.

113.2 billion more credit was extended in May. The rise was 140.4 billion yuan less than last May. Special attention should be paid to the growth of short-term loans which was about 70 billion yuan less than the same month of last year.

Conclusion

The situation in May was basically good according to the indications mentioned above and is going toward the expected direction set by the macro-control policy. However, prominent problems cannot be neglected.

Energy shortage and transportation were still bottlenecks. Power generation lagged behind the power consumption. Demand for railway transportation outran the supply. These showed great demand on one hand and a too rough economic growth on the other. Economic restructuring and transformation of economic growth are arduous tasks.

Fixed assets investment in some sectors need cool down further. From January to May, investment above 5 million yuan in steel, cement and aluminum projects soared up by 76.6, 55.3 and 38 percent respectively, still too high. A close watch will be given to projects under control to make sure no rebound in the wake of the campaign of investment inspection.

The problems mean macro-control is no easy task. Economic operation should be put under monitoring. Various measures which have been in place for the macro-control should be carried on. Efforts should be focused on optimizing the structure, deepening reform, improve the system and promote the transformation of the way of economic growth. Scientific concept of development and right concept of government performance should be implemented to secure the steady and fast growth of national economy.