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NBS: National Economy Facing Two Major Pressures

According to official statistics, Chinas gross domestic product (GDP) for the first half of this year was RMB 13.06 trillion, a year-on-year growth of 10.4 percent. This represents a 1.8 percent drop in the growth rate compared to the same period last year. At the same time, the consumer price index (CPI) rose by 7.9 percent. According to Li Xiaochao, chief of the Department of National Economy Comprehensive Statistics at the National Bureau of Statistics (NBS), the Chinese economy is facing major pressures on two fronts: inflation and unemployment. Maintaining a rapidly developing economy will most likely increase employment, but as Li points out: “This also tends to push up prices. We need to seek balance between the two ends.”

Gao Hucheng: China to Adjust Foreign Trade Policy

“Appreciation of the yuan and changes in international markets have made the export of textiles, garments and other products in labor-intensive industries more difficult,” says Gao Hucheng, vice-minister of commerce. At present, the Ministry of Commerce and other relevant government departments are monitoring the situation. “We will formulate new policies based on timely investigations,” says Gao. At the end of 2007, the Chinese government cut tax rebates for many export industries in an effort to curb Chinas swelling trade surplus. The surplus did shrink in the first six months of this year. China Customs data shows that the trade surplus was down by 11.8 percent year-on-year, a net decrease of US $13.21 billion. The trade surplus in June was US $21.4 billion, a decrease of 20.5 percent compared to the US $26.9 billion in June 2007.

Zhou Zhengqing: Ensuring Stable Growth of the Stock Market

At the forum “Chinas Asset Pricing Under Global Inflation” Zhou Zhengqing, former chairman of the China Securities Regulatory Commission, noted that Chinas economy is not suffering any fundamental problems. However, referring to the recent slump in the stock market, Zhou argued it is necessary for the government to adopt economic, legal and administrative measures to promote stable and sound growth of the capital market. He emphasized that the government does not need to interfere when the market runs in order. However, if there are unusual fluctuations which affect the stable development of the economy and society, the government needs to make necessary adjustments. This is a view shared by many governments around the world. He suggested that China should construct a mechanism for market security and emergency responses. “We need to proceed from the reality of our situation, and should not blindly compare our market with the mature ones of developed countries. It will lead us to make wrong judgments and mislead our market,” says Zhou.