China's economic growth slowed further in the third quarter, with the central government's macro-control measures to cool the economy taking effect.
The economy grew year-on-year by 9.1 percent in the quarter, slowing from the 9.6 percent in the second quarter and 9.8 percent in the first quarter, figures from the National Bureau of Statistics indicate.
For the first three quarters, the country's gross domestic product grew at 9.5 percent to around 9.3 trillion yuan (US$1.1 trillion).
Bureau spokesman Zheng Jingping said the figures suggest the government's macro-control measures have achieved significant results.
"Some unstable and unhealthy factors existing in economic life have been brought under control," he said. "The weak links have also been strengthened."
During the first three quarters, fixed asset investments rose 27.7 percent year-on-year to 4.5 trillion yuan (US$543.4 billion), while retail sales were up 13 percent to 3.8 trillion yuan (US$463.1 billion).
The consumer price index (CPI), a key inflation gauge used by policy-makers, rose 4.1 percent year-on-year during the first three quarters. It rose 5.2 percent in September.
Economic development was fairly stable, he said.
"So long as we continuously implement various macro-control policies... the targets set at the beginning of this year for economic and social development are achievable," Zheng said.
The Chinese Academy of Social Sciences predicted earlier the country's economy would grow 9.4 percent this year and slow slightly to 8.9 percent next year.
Wang Tongsan, a senior economist at the academy, said the country's economic growth this year should be higher than last year's 9.1 percent, since the economy has moved into an upward development period.
"If there are no major breaking events internationally or severe natural disasters and other major domestic issues, the country's economy is capable of maintaining a growth rate of more than 8 percent next year, due to the macro-control measures," he said.
"The current overall performance of the economy is good," Wang said.
However, some prominent problems existing in the economy have not been fundamentally rooted out, he said.
The energy and transportation bottlenecks, the possible rebound in the fixed asset investment and rapid declines in money supply and loans are still troubling, he said.
Niu Li, a senior economist at the State Information Center, said the government should also be alert to further price rises because price pressures are already quite heavy.
"While food prices remain at a higher level, international oil prices have risen rapidly," he said.
Global oil prices have spiked beyond US$55 per barrel during the past week.
"There are also signs that raw material prices may be rebounding," he said.
The price rises will have a certain negative impact on ordinary people's life, Niu said.
Chinese people have already suffered from negative interest rates.
"Negative interest rates will result in people's lower expectations for the future," said Qi Jingmei, another economist with the center.
Such rates also lead to a decline in bank deposits, she said. "This will make purchasing power drop."
"Some low-income families have even begun to worry whether their incomes will be able to meet their basic needs for food and clothing," Qi said.
"Their health could also be at risk, because they will buy the cheapest products and not pay much attention to the quality of food."
Qi added that the impact of the price rises is greater in rural areas as farmers' income is much lower than urbanites.
Although farmers' per capita incomes rose 11.4 percent year-on-year during the first three quarters of the year, retail sales in rural areas grew only 9.9 percent. The growth rate was 4.7 percentage points lower rurally than in urban areas.
The State Coucil held its executive meeting yesterday to review the national economic situation in the third quarter and arrange economic work for the fourth quarter. It was chaired by Premier Wen Jiabao.
The participants agreed that in the past quarter, the overall economy continued to develop toward the set macro-control targets.
They said that the government should continue to carry out the macro-economic control measures in the fourth quarter so as to achieve the targets set for the year and lay a good foundation for next year.
(China Daily October 23, 2004)
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