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BEIJING: China’s economic juggernaut slowed but still maintained
double-digit growth in the first half of the year as it battled
inflation and absorbed global setbacks, official data showed
Thursday.
The world’s fourth biggest economy expanded by
10.4 percent in the first half and 10.1 percent in the second
quarter, the National Bureau of Statistics said, down from the
sizzling pace of 11.9 percent recorded for all of 2007.
Bureau spokesman Li Xiaochao said domestic
inflation, problems with food supplies and global economic woes were
among the chief concerns for China.
“Pressure for rapid price increases remains
high, there are factors constraining steady agricultural
production,” Li said.
“The international financial situation is
severe and there are uncertainties in world economic development.”
Nevertheless, he said China’s economy remained
strong and that the slowdown was under control.
“The national economy maintains the momentum
of steady and fast growth,” he said. “This slowdown is in line
with our expectations.”
The statistics bureau’s chief economist, Yao
Jingyuan, said the economy would likely grow at 10 percent for the
full year, although this was still above the target set by Premier
Wen Jiabao of 8 percent.
China’s consumer price index— the main gauge
of inflation—rose 7.9 percent in the first half of 2008, with food
prices soaring 20.4 percent, according to the bureau.
But inflation has come off 12-year highs seen
earlier in the year, when it peaked at 8.7 percent in February, with
economists saying the fall was because of a raft of economic
tightening measures, including interest rate hikes.
For June alone, inflation was 7.1 percent, the
bureau said.
Nevertheless, there were few expectations
inflation would fall steeply enough to achieve the government’s
full-year target of 4.8 percent.
China had already released data last week
showing the nation’s trade surplus had fallen nearly 12 percent in
the first half, as exporters struggled with the global economic
slowdown, particularly problems in the United States.
The appreciation of the yuan against the dollar,
as well as curbs such as tariffs on exports imposed by the
government to rein in the surplus, also contributed to the decline.
Jing Ulrich, chairman of China Equities for JP
Morgan Securities, said that although the economy was slowing down
and exporters were feeling the heat, the government had the tools to
maintain control.
“Despite the multiple challenges of a global
slowdown, high inflation and natural disasters, the Chinese
authorities have a range of options for addressing the key domestic
policy challenges,” Ulrich said.
Zhang Xinfa, an economist with Galaxy
Securities, agreed with the official assessment that the slowdown
was steady and controlled, although he said the government had to
ensure its tightening policies did not bite too deeply.
“The government must strike a balance between
maintaining economic growth and fighting inflation,” he said.
Economists said the earthquake that devastated
large areas of southwest China in May, leaving 88,000 people dead or
missing, did not have a big impact on the economic growth numbers in
the second quarter.
However, a huge post-quake reconstruction effort
could lift the growth numbers in the short term, according to
Moody’s Economy.com economist Sherman Chan.
“Rapid and large-scale reconstruction works in
the next couple of years will provide a boost to economic
activity,” he said.
Industrial output, a key measure of activities
in the nation’s factories, expanded by 16.3 percent in the first
half and 16 percent for June alone, according to the bureau.
China’s fixed asset investments rose 26.3
percent in the first half of 2008 from a year earlier, the bureau
said.
-- AFP
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