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China's Economic situation generally sound: SSB
22-04-2004
2004/04/22

China's economic situation is sound in general, but the government still needs to prevent possible over-heating through control of the real estate sector and bank loans, said the State Statistical Bureau (SSB) in an exclusive interview with Xinhua on Wednesday.

However, the government will not use methods that may cause enormous ups and downs and bring about huge losses to the economy,an official of the SSB said.

On April 15, the SSB published major indexes of the country's economic situation in the first quarter. Between January and March,China's GDP grew by 9.7 percent, with both the indexes of consumers and entrepreneurs going up steadily. The consumer price index rose moderately, increasing 2.8 percent year-on-year and within government control, and a 43 percent investment growth in the fixed-capital sector.

The fact that the country's foreign trade was in the red and consumer prices went up in the first quarter had eased pressure onChina's currency, the RMB, which has been under international pressure for appreciation. Those who bet on RMB appreciation are doomed to fail, the official said.

While attributing the fast investment growth in the fixed-capital sector to historic and economic factors, he also criticized some local leaders for their blind pursuit of speedy economic growth and ignorance of scientific concepts of development.

Investment structure was not rational. The investments in the manufacturing sector and the tertiary industry (including the realestate sector) grew by 75.8 percent and 37.7 percent, respectively,while investment in the primary industry saw a mere 0.4 percent increase. The official said this had resulted in pressure on the supply of major raw materials, energy and transportation, and pushed up prices. These, in turn, pushed up the investment in relevant sectors.

The official highlighted the importance of macro-economic control, quoting Premier Wen Jiabao, who said in a press conference on March 14, that macro-economic control is just as difficult as coping with SARS (severe acute respiratory syndrome).

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