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Economist: China's real estate to be optimistic(2008/8/19)
         The development of real estate in China has good prospects in the long run despite the sluggish demand, an expert from the National Development and Reform Commission (NDRC) said here Sunday.
"The development of the real estate has good prospects in a relatively long term. After rational adjustment, it will show a more sound development trend," said Wang Yiming, vice president of the Macro Economy Research Institute of the NDRC.
Amid an estimated continuous urbanization drive in China, more people may move to cities in the next decade and more, creating increasing demand for houses, Wang told a press conference at the 2008 Beijing International Media Center.
Relative policies and measures will be worked out sooner or later to promote the stable and sound development of the sector, which is of great significance to the national economy, said Wang.
However, he ruled out any direct links between the Olympic Games and the housing market, saying the key factors affecting the real estate is the urbanization drive and reforms of the traditional house distribution system in the country, which pushed more people to buy commercial apartments.
Statistics show that real estate investment accounted for nearly 20 percent of the total investment in fixed assets last year, driven up by about 5 percent as against 2000, according to the expert.
He said real estate investment increased by more than 30 percent between January and July this year, despite the shrinking housing demand since the second half of last year.
The housing price decline in some cities has strengthened a wait-and-see attitude among housing buyers, which retarded housing sales.
The country's real estate developers, which experienced huge profits in the past decade, sold out about 260 million square meters of houses in the first six months this year, and the sales value totaled one trillion yuan, representing an decrease of 7.2 percent and 3.0 percent, respectively, over the same period last year, statistics show.

China's urban fixed assets investment up in first seven months(2008/8/18)
          (Xinhua) -- China's urban fixed assets investment totaled 7.216 trillion yuan (1.05 trillion U.S. dollars) in the first seven months, up 27.3 percent from the same period last year, the National Bureau of Statistics (NBS) said on Friday.
The figure represented a slight acceleration, of 0.5 percentage points over the first half figures and of 0.7 percentage points over the figures for the same period in 2007.
Investment in the booming real estate sector grew 30.9 percent to 1.58 trillion yuan, according to the NBS. The growth rate was 2.6 percentage points lower than that of the first half.
Wang Tongsan, a researcher with the Chinese Academy of Social Sciences, said that with the overall stable growth of fixed assets investment, the country could actively respond to uncertainties and risks in the economy and maintain a stable and relatively high economic growth rate.
According to the NBS, the growth rate in the primary sector (farming, fishing, forestry) was the fastest among the three major sectors in the first seven months, up 61.9 percent, compared with the secondary sector at27.9 percent and the tertiary sector at 26 percent.
"The 61.9 percent surge in investment in primary industry was a good sign as the government moved to shore up agricultural development and the foundation of the national economy," Wang said.
Statistics from the NBS showed investment in projects authorized by the central government rose by 25.3 percent in the first seven months over the same period of 2007. In local government-approved projects, investment expanded by 27.5 percent.

China's retail sales up 23.3% in July(2008/8/15)
          (Xinhua) -- Domestic retail sales leaped a brisk 23.3 percent to 862.9 billion yuan ( 125.8 billion U.S. dollars) in July this year, the National Bureau of Statistics (NBS)said on Wednesday.
The growth rate was 6.9 percentage points higher than the same period last year and 0.3 percentage points higher than the previous month.
That brings China's retail sales of consumer goods in the first seven months of this year to 5.9672 trillion yuan, up 21.7 percent, compared with 15.5 percent growth rate recorded over the same period of last year, the NBS said.
The NBS said urban consumption hit 590.5 billion yuan, up 24 percent year-on-year, compared with 272.4 billion yuan spent by rural residents, up 21.8 percent.
Wholesale and retail sales rose 23.3 percent to 730.3 billion yuan, while catering and hotel activity rose 26.5 percent to 116.8billion yuan.
Clothing sales rose 26.8 percent, while daily consumer goods were up 19.5 percent and household appliances were up 18.8 percent. Grain and edible oil jumped 18.3 percent year-on-year.

China posts more than 40% growth in FDI actually used in 1st 7 months(2008/8/14)
         (Xinhua) -- China saw a growth of almost 45 percent in foreign direct investment (FDI) actually used in the first seven months of this year, due partly to high interest from overseas investors, the Ministry of Commerce said on Wednesday.
But analysts said it should not rule out possibility for short-term speculative capital, or hot money, rushing into the mainland through Hong Kong.
From January to July, China approved the establishment of 16,891 overseas-funded enterprises, a decline of 22.15 percent from the same period last year. However, the FDI actually used nationwide amounted to 60.724 billion U.S. dollars, up 44.54 percent.
Mei Xinyu, a researcher with the ministry's research institute of foreign trade and economic cooperation, said the growth in FDI and the fall in the number of overseas-funded businesses established indicated the per project average FDI used had increased substantially.
Analysts said foreign capital was shifting from the manufacturing sector to the service sector and new-technology and high-tech projects.
Meanwhile, as Wang Chao, assistant to the commerce minister, pointed out, more foreign funds poured into central and western regions. In the first half, the central region doubled FDI it used, while the western region recorded a 140-percent growth.
Analysts also noted that it was possible for large amounts of hot money to contribute to the fast growing FDI through Hong Kong,which accounted for 40 percent of the FDI nationwide.
The commerce ministry said that in the first half year, of the FDI actually used nationwide, 23.39 billion U.S. dollars came from Hong Kong, up 94.5 percent year-on-year.

China reports 6.3% rise in CPI in July(2008/8/13)
        (Xinhua) -- China's consumer price index (CPI), a measure of inflation, was up 6.3 percent in July, the National Bureau of Statistics announced on Tuesday.
The figure, compared with 7.1 percent in June and 7.7 percent in May, was broadly in line with most forecasts.
"The continuous decline of the CPI is a positive sign as it shows the government's measures to ease inflationary pressures were effective," said Zhang Xiaojing, an analyst with the Chinese Academy of Social Sciences.
Zhang attributed the decline to falling food prices and shrinking demand due to the economic slowdown.
Food prices, which account for more than a third of the CPI calculation, rose 14.4 percent in July, 2.9 percentage points lower than June and 6 percentage points lower than the growth for the first half.
The price of meat increased 16 percent, while that of pork rose12.1 percent. Cooking oil went up 30.8 percent, vegetables up 8.4 percent, aquatic products up 18.3 percent and grains up 8.6 percent.
In the first seven months of this year, the inflation indicator rose 7.7 percent from the same period last year: 7.4 percent for urban areas and 8.3 percent for the countryside.
The PPI for industrial products was up 10 percent in July over the same period last year, the highest since 1996, the bureau said on Monday.
The PPI rise would not immediately increase pressure on the CPI, said Zhang Liqun, a researcher with the State Council Development and Research Center.
Xu Lianzhong, an analyst from the National Development and Reform Commission, predicted that the PPI rise in August would be moderate and the CPI was expected to continue to fall in coming months.
However, some analysts believe the upside inflation risks remain strong, as producer price growth has been accelerating. Many businesses are believed to have squeezed profit margins in recent months, as the CPI has failed to reflect the surge in production costs.
China's CPI figure was above 4 percent since June last year due to surging pork prices, reaching a 12-year-high of 8.7 percent in February.
"Although China is faced with less inflationary pressure, we still need to remain cautious of price fluctuations and give priority to curbing price hikes and preventing inflation," said Xu.
Xu said the government should raise subsidies for low-income families and personal income tax thresholds, and remove taxes on bank savings interest in order to stimulate domestic demand.
Sherman Chan, an analyst with Moody's Investors Service, said higher production efficiency could reduce business costs and slow inflation. The government could consider improving infrastructure and facilitating technology development, both of which would boost productivity without creating inflationary pressures. "There are policy options that can kill two birds with one stone."
Zhang said China's annual CPI growth target of 4.8 percent would be missed this year. However, given the downward adjustments, the average CPI rise in the fourth quarter could reasonably be expected to reach the desired rate.

China's PPI rises 10% in July(2008/8/12)
        The producer price index (PPI) for China's industrial products rose 10.0 percent year on year in July, the National Bureau of Statistics said on Monday.
The double-digit growth of PPI, which measures the value of finished products when they leave the factory, was the highest since 1996.
The PPI jumped 8.0 percent year on year in the first seven months, compared with 7.6 percent in the first half this year, said the NBS.
The purchaser prices for raw materials, fuel and power rose 15.4 percent in July, compared with 13.5 percent in June.

China's new energy rule in the works(2008/8/11)
        (Xinhuanet) -- The government is drafting an energy regulation to stop new fixed-asset projects that do not meet national energy standards.
Aiming to curb the investment frenzy and help realize China's energy-saving targets, the regulation means investors cannot be given a go-ahead if they don't design detailed energy-efficient schemes.
Currently 10 provinces, municipalities and autonomous regions such as Beijing, Tianjin, Jiangsu and Inner Mongolia have started to put the rule into pilot operation.
"We are going to announce the draft regulation as soon as possible based on the experiences gained by the pilot regions," said Xie Zhenhua, vice-minister of the National Development and Reform Commission, which is coordinating energy-efficient projects and climate change issues.
If the new regulation is approved and implemented nationwide, it will mean that all new fixed-asset projects will be assessed by the government in accordance with their environmental impact and energy-saving potential.
Xie said the new regulation is drafted in line with China's Energy Conservation Law, which took effect on April 1.
"Once the regulation is put in place nationwide, we can move closer to our energy-saving targets," Xie is believed to have said at a recent closed-door discussion on the new regulation. "If implemented properly, this can help us stop those energy-crunching projects right at the beginning."
The pilot regions, Xie said, have already made progress by assessing the energy-efficiency potential of the new projects. For example, Beijing has strictly enforced the assessment system, which helps it achieve annual energy saving goals.
However, in some other regions, Xie said there is a "lack of leadership" in implementing the practices stipulated in the energy conservation law. "We should not only monitor those factories in operation but also assess new projects."
Xie said this can require investors to push forward industrial restructuring and technical innovation to gradually weed out outdated production methods.
Currently, the government focuses on previewing and checking energy implications of projects in real estate, the transport sector and government buildings to improve energy efficiency and reduce greenhouse gas emissions.
Under the 11th Five-Year Plan (2006-10), China has pledged to cut energy consumption per unit of GDP by 20 percent, or 4 percent each year. Official statistics show that in 2005, 27.5 percent of China's energy consumption was in the construction sector, with transportation accounting for 16.3 percent and government buildings, 6.7 percent.
China needs "systematic reforms" to realize its goals of cutting energy consumption, said Lin Yueqin, an economist with the Chinese Academy of Social Sciences.
"And the focus should be designing an accountability system to change the local governments' mindset of blindly speeding up investment," Lin told China Daily.
Vice-Minister Xie Zhenhua said some local governments are investing heavily in resource-intensive sectors ignoring the central government's directive to save energy and reduce emissions.
Though the national economy has slowed down, China's investment in fixed assets in the first half of this year such as roads and factories reached 26.3 percent, up 0.4 percentage point year-on-year.
Since 2003, mainly due to local governments' investment frenzy, the growth rate has remained high despite the central government's determination to slow it down. This momentum is likely to continue in the second half of this year as the earthquake and the blizzards have triggered demand for more construction.
"We should keep the necessary, environment-friendly and energy-efficient projects going," said Lin.
An official inspection last year discovered that only 53 percent of projects under construction are actually keeping their energy-saving promises. Nearly all of them had pledged at the design stage that they would meet national standards on energy saving.
This disregard for energy conservation requirements by property developers poses a threat to meeting the overall green goal, in which the construction sector is expected to contribute almost 30 percent of total energy savings.
"The findings are alarming," said Song Chunhua, chairman of the China Real Estate Association. "More tough measures are needed to achieve the national goal." (Source: China Daily)

Factbox: facts about China's economy(2008/8/7)
       Beijing, the capital of China -- one of the world's fastest growing economies -- is hosting the Olympics Games from Aug.8 to 24 and the Paralympic Games from Sept.6 to 17.
Some facts about the economy:
GDP: gross domestic product(GDP) totalled 13.0619 trillion yuan (1.9062 trillion U.S.dollars) in the first half of 2008, a 10.4 percent increase year on year.
GDP was 24.6619 trillion yuan in 2007, ranking fourth in the world.
FOREIGN TRADE: Over 230 countries and regions trade with China. Foreign trade was 1.2342 trillion U.S.dollars in the first six months of 2008, up 25.7 percent year on year. 2007's total was 2.1738 trillion dollars.
Export volume was 1.2180 trillion U.S. dollars, and import volume was 955.8 billion dollars in 2007.
FOREIGN EXCHANGE RESERVE: 1.8088 trillion U.S.dollars by the end of July 2008.
PEOPLE'S INCOME: China's urban per capita disposable income was 8065 yuan in the first half of 2008, up 14.4 percent year on year; that of rural residents 2528 yuan, up 19.8 percent year on year.
2007's urban per capita disposable income was 13786 yuan in 2007, and of rural residents 4140 yuan.
FISCAL REVENUE: totaled 5.13 trillion yuan in 2007, growing about 32.4 percent year on year.
ECONOMIC STRUCTURE: manufacturing and tertiary industry are the driving force behind economic growth.
Tertiary industry is the new fast-growing sector of the economy and is playing a leading role in creating jobs.
DOMESTIC TRADE: retail sales of consumer goods totaled 8.921 trillion yuan in 2007, growing 16.8 percent year on year. Urban retail sales were 6.0411 trillion yuan, up 17.2 percent; rural sales were 2.8799 trillion yuan, up 15.8 percent.
CONSTRUCTION INDUSTRY: increased 1.4014 trillion yuan in 2007, up 12.6 percent year on year.
Fixed asset investment in 2007 was 13.7239 trillion yuan, a year-on-year increase of 24.8 percent. Urban investment was up 25.8 percent to 11.7414 trillion yuan; rural investment 1.9825 trillion yuan, up 19.2 percent.
TAX REVENUE: 49.449 trillion yuan (7.2719 trillion U.S.dollars) in 2007, up 11.813 trillion yuan, or 31.4 percent year on year.
GRAIN OUTPUT: China's grain output in 2007 totaled 501.5 million tonnes, growing about 3.5 million tonnes compared with last year, up 0.7 percent. Summer grain output was 115.34 million ton, up 1.3 percent; autumn grain 354.2 million tonnes, up 0.6 percent.
TOURISM: China is the world's fourth largest country for inbound tourism. The number of oversea tourists was 131.87 million in 2007. Foreign exchange income was 41.9 billion U.S. dollars, the world's sixth in 2007. The number of domestic tourists totaled 1.61 billion, with a total income of 777.1 billion yuan.
According to the World Tourism Organization, in 2020, China will become the largest tourist country and the fourth largest for overseas travel.

China's dependence on foreign trade tops 60% (2008/8/6)
      (Xinhua)-- China's reliance on foreign trade had exceeded 60 percent, which made the country more sensitive to price changes on international markets and caused the ensuing external-driven inflation in the nation, sources with the National Bureau of Statistics (NBS) said on Tuesday.
The country's inflationary pressure was mainly driven by price rises for crude oil, grain and iron ores worldwide, according to the NBS.
The rocketing crude prices affected the Chinese economy greatly, as the nation relies on imports to meet nearly 50 percent of its oil demand. Given the price rises for crude and government capping on domestic prices of refined oil products, the oil refining sector has losses 50 billion yuan (7.3 billion U.S. dollars) so far this year.
More than 50 percent of China's annual demand for iron ores are met with imports. The nation suffered from price rises for iron ores year after year--the price was up 71.5 percent in 2005, up 19percent in 2006, up 9.5 percent in 2007 and up more than 65 percent in 2008. Higher iron ore prices have driven up prices of rolled steel and related products, thus escalating the inflationary pressure.
According to the statistical bureau, China's factory-gate price index rose eight percent in March, 8.1 percent in April, 8.2 percent in May and 8.8 percent in June. It will affect the consumer price index (CPI), a major gauge of inflation, in six months or one year.
The country's CPI rise hit a 12-year-high of 8.7 percent in February, and averaged 7.9 percent for the first half of this year.

Beijing's GDP to break 1-trillion-yuan mark in 2008(2008/8/5)
         Beijing's gross domestic product (GDP) is expected to break the 1-trillion-yuan mark (146.2 billion U.S. dollars) this year thanks to its hosting of the Olympic Games, a city official said on Sunday.
The Games had given impetus and vigor to Beijing's economy and helped the city achieve sound and fast economic development, said Wang Haiping, deputy director of the Municipal Development and Reform Commission (BMDRC).
In 2007, the city's GDP grew 12.3 percent over a year earlier to stand at 900 billion yuan, twice that of 2001 when it won the bid to host the Games, Wang said. Over the past six years, Beijing's annual GDP growth was 12.4 percent on average.
Figures from the Beijing Statistics Bureau (BSB) showed the city's GDP reached 497.3 billion yuan in the first half, up 11 percent from the same period last year.
Wang said GDP per capita had risen from 3,262 U.S. dollars in 2001 to 7,654 dollars last year, and would surpass 8,000 dollars this year.
Hosting the Olympic Games had boosted the city's economy with infrastructure investment, a better environment, increased consumption and improved living standards, he said.
According to the BSB, Beijing's annual GDP growth from 2005 to 2008, which saw huge investments for the Olympics, would reach 11.8 percent on average, 0.8 percentage point higher than the 2001-2005 period.
In 2007, the Olympic factor contributed 1.14 percent to the growth rate, according to BSB estimates.
The bureau forecast the Olympic factor, which referred to the impetus generated by investment in infrastructure and sports facilities, would add 0.85 percent to Beijing's GDP growth this year.
As a whole, economic activities related to the Games would have generated a combined GDP of 105.5 billion yuan for Beijing during 2004-2008, according to the BSB.
The municipal government reported on Friday that it had spent less than 13 billion yuan on the construction of 31 competition venues, 45 training venues and other Games facilities.
On Saturday, BMDRC deputy director Lu Yingchuan said economists were generally agreed that the economy of Beijing would experience no big fluctuations or slump after the Olympics.

Premier promises clean, scenic Beijing during and after Olympics(2008/8/4)
        BEIJING, Aug. 3 (Xinhua) -- Chinese Premier Wen Jiabao on Sunday promised to maintain a clean, green and beautiful Beijing during and after the Olympic Games.
Five days ahead of the Games, Wen visited athletes in training as well as volunteers and utility workers.
"China is a responsible country. We will fulfill the promises we made for the Olympics. We will not only host a quality and unique Games, but build a more scenic, greener and more civilized city in a sustainable manner," he said.
Through the efforts of the whole society, China would host a grand sport event that satisfied the world, the athletes and audiences, he said.
On Sunday morning, Wen, with senior officials of the Beijing Organizing Committee of the 29th Olympic Games (BOCOG) Liu Qi, Liu Yandong and Guo Jinlong, visited the Beijing Olympic Basketball Gymnasium in the west of the city.
China's men's national basketball team was training in the stadium. Wen shook hands with the players and coaches, including the NBA star Yao Ming, who had recovered from his left foot injury.
"Are you feeling well? Is your foot okay?" Wen asked China's most famous basketball player.
"I loved playing basketball when I was a kid. It is still my favorite game," Wen said, joining the players to shoot hoops.
The Chinese team will play its Olympic debut against the United States on Aug. 10.
"Your first game will attract great attention. What you need is confidence and composure. No matter you win or lose, it is important to play with a sporting spirit," Wen said. "I hope you can win glory, dignity and friendship, displaying the true personality of Chinese."
The team presented Wen with a basketball signed by the whole squad and Wen also signed the ball with which he had played.
He also met with volunteers working at the stadium and encouraged them to serve "in a careful and serious manner with a strong sense of responsibility".
Wen's next stop was the Dajing neighborhood near the Fengtai Sports Center Softball Field to hold the Olympic softball events.
Old buildings in the neighborhood have been renovated, trees and grass planted and sport facilities built for residents.
Wen dropped in at the house of Shi Lin, who told him he was quite happy about the changes in his neighborhood.
The city's efforts to develop infrastructure and protect the environment had improved living conditions, he said.
"The Games are very short, but what is left behind will last," Wen said. "I, together with Liu Qi (Beijing party chief), promise that Beijing will stay as clean as now after the Olympics."
Noting that many local people were Olympic volunteers, Wen expressed appreciation for their efforts to keep the city safe and stable and to serve the visitors.
About 1 million Beijing residents have volunteered.
Later Wen visited a power plant of the China Huadian Corporation, which is to supply electricity for the Games. The plant, fueled by natural gas, has adopted eco-friendly technologies, including a cooling system that uses recycled water.
As Wen was overseeing preparatory work in western and southern Beijing, about 8,000 technicians were busy testing information services for the Games in the Digital Beijing Building, a comprehensive information facility in the city's north near the National Stadium, or Bird's Nest.
They are to provide technical services for 31 competition venues, 15 non-competition venues and venues in co-host cities in upcoming five days.
"There is no second chance for us. Once the Games start, our work has to be successful," said Yang Yichun, director of the BOCOG Technology Department. "We are confident of technical support."
On the street near the Bird's Nest, a police motorcycle escort team was launched on Sunday to lead the way for Olympic-related vehicles and cavalcades.
South of the Bird's Nest, Han Rubing and her family were getting their home ready as one of the Olympic home-stay families.
She and her husband had been improving their cooking skills.
"I hope my home can be a small window for foreigners to learn about China and the Chinese," said the university teacher.
Meanwhile, thousands of miles from Beijing, the Olympic torch started its three-day relay in southwestern Sichuan Province, which was devastated by the May 12 earthquake.
At the first stop Guang'an, people shouted "Go China" and "Go Sichuan" after one-minute silent tribute for earthquake victims.
Sichuan will be the last stop before the torch reaches Beijing.

European inflation accelerates to 16-year high(2008/8/1)
        BEIJING, Aug. 1 -- Inflation in Europe accelerated to the fastest pace in more than 16 years in July after oil prices reached a record.
The inflation rate rose to 4.1 percent from 4 percent in June, the European Union statistics office in Luxembourg said yesterday. The rate, the highest since April 1992, matched the median estimate of 36 economists. A separate report yesterday showed unemployment remained at 7.3 percent.
The European Central Bank, which aims to keep inflation just below 2 percent, raised its key interest rate by a quarter point to 4.25 percent on July 3, a seven-year high. The risk is that higher borrowing costs will exacerbate the economic slowdown. Europe's manufacturing and service industries are contracting and confidence in the economic outlook this month plunged the most since the Sept 11 terrorist attacks in 2001.
"The ECB's hands are tied by the inflation rate and the risk of second-round effects," said Aurelio Maccario, an economist at Unicredit MIB in Milan. "But barring any further surge in oil prices, there is a good chance that we are seeing the peak."
Crude oil prices have retreated to around $126 a barrel after reaching a record $147.27 on July 11. They're still up 60 percent from a year ago, while prices for commodities including steel, corn and wheat have also soared.
The ECB wants to prevent companies passing on higher costs and has urged workers not to seek pay increases to compensate for increased living expenses, saying this may unleash a wage-price spiral. Workers at Deutsche Lufthansa AG, Europe's second-biggest airline, are striking in pursuit of a 9.8 percent pay claim.
A European Commission gauge of companies' selling-price expectations rose to a 13-year high in July and Italian wage growth accelerated to 3.6 percent in June, the highest in more than three years.
"We'll have to continue to raise prices because of higher raw-material costs," Juergen Hambrecht, chief executive officer of BASF SE, the world's largest chemical producer, said yesterday.

Forum on Pan-Beibu Gulf economic cooperation opens in China (2008/7/31)
          NANNING, July 30 (Xinhua) -- A two-day forum on Pan-Beibu Gulf economic cooperation opened on Wednesday in Beihai, a coastal city in south China's Guangxi Zhuang Autonomous Region, with more than 600 attendees.
It is the first such event since the State Council, or cabinet, approved a plan submitted by Guangxi featuring "Guidelines Regarding Development of the Beibu Gulf Economic Zone in Guangxi" in January.
The Beibu Gulf sits south of Guangxi. Pan-Beibu economic cooperation involves seven countries: China, Vietnam, Malaysia, Singapore, Indonesia, the Philippines and Brunei.
Among the participants in the forum are officials from member states of the Association of Southeast Asian nations and China, the staff of the United Nations organizations, Nobel Prize laureates in economics, representatives of the world's top 500 companies and multinationals and diplomats from Pan-Beibu Gulf countries to China, according to the forum organizers.
Participants will exchange views and hold discussions on three topics: Pan-Beibu Gulf economic cooperation amid an uncertain world economy; focal points, difficulties and prospects in Pan-Beibu Gulf sub-regional cooperation, and the opening and development of the Beibu Gulf Economic Zone and Pan-Beibu Gulf economic cooperation.

Chinese urban workers' per capita salary up 18% in H1(2008/7/30)
         (Xinhua) -- Urban workers' per capita salary averaged 12,964 yuan (1,878 U.S. dollars) in the first half of this year, up 18 percent year-on-year, China's National Bureau of Statistics said on Monday.
The per-capita salary for employees at urban state-owned enterprises was 13,800 yuan, up 17 percent, and that for workers at private entities, 12,610 yuan, up 19.2 percent.
Urban workers' per-capita salary was 24,932 yuan for all of last year.
The per-capita disposable income of urbanites rose 14.4 percent, or 6.3 percent in real terms, to 8,065 yuan in the first half.
The consumer price index, a major gauge of inflation, rose 7.9 percent in the first half.
Farmers' per-capita cash income stood at 2,528 yuan in first half, up 19.8 percent, or 10.3 percent adjusted for inflation.

Consensus: China's GDP to grow 10%, CPI rise 6.1% in Q3(2008/7/29)
         BEIJING, July 28 (Xinhua) -- A consensus estimate produced by 17 Chinese and foreign institutes is that China's gross domestic product (GDP) will grow 10 percent and the consumer price index (CPI) will rise 6.1 percent during the third quarter, down 0.1 percentage points and 1.7 percentage points, respectively, from the second quarter.
"The government's tight monetary policy is beginning to work to bring down inflation with the quickened pace of renminbi appreciation and a slowdown in money supply and GDP growth, " Lu Feng, a professor at Peking University and one of the forecasters, said on Monday.
"The dramatic increase in demand since last year was driven by money supply growth," said Song Guoqing, another Peking University economist. "However, statistics released in June showed a steady downward trend in money supply.
"Besides, a large portion of the 'hot money' is deposited in banks to profit on interest rate and foreign exchange rate differentials. Plunging stocks have caused wealth losses. These are being translated into a slower pace of fund circulation," said Song.
"Considering changes in the pace of fund circulation and money supply, the growth rate in overall demand is expected to continue slowing," Song observed.
China's GDP grew 10.6 percent in the first quarter and 10.1 percent in the second, with 10.4 percent growth for the first half of 2008. The CPI stood at 7.9 percent in the first half.

China to strengthen control on coal price increase(2008/7/28)
         BEIJING, July 24 (Xinhua) -- China urged local regulators to tighten controls on coal price increases to help power producers cope with rising fuel costs, the National Development and Reform Committee (NDRC) said in a statement on Thursday.
Prices for thermal coal at major ports, including Qinhuangdao, Tianjin and Tangshan, could not rise beyond the price cap set on June 19, the NDRC said.
Coal producers that continued raising prices and traders who hoarded supply to jack up prices would be punished according to the country's Price Law. Such violators would also face media exposure, it said.
The country's power producers have felt the pinch of soaring coal prices as they had to increase output to ease power shortage, which was expected to hit 16 million kw this summer.
"Coal-fired power plants, which supply 78 percent of the country's electricity, are pressured by soaring coal prices and increasing prices in electricity," Dongguan Securities analyst Yu Chunyan said.
NDRC raised the retail electricity price by 0.025 yuan per kwh on July 1. The increase, however, could only cover 15 percent of the losses in coal-fired power plants, said a Citic Securities analyst.
The top five power producers had seen their combined profits more than halved in the first half because of higher coal prices, according to the State Electricity Regulatory Commission.
To protect power plants' profits, the NDRC imposed temporary controls on the factory prices of thermal coal, capping them at a price that prevailed on June 19 through the end of the year.
The fuel prices, however, continued rising, surging 22 percent to more than 1,000 yuan (146.6 U.S. dollars) per tonne in Qinhuangdao since June 19.

China to restructure major SOEs after Olympic Games (2008/7/25)
        BEIJING, July 24 -- China will restructure centrally administered state-owned enterprises after the Beijing Olympics, State-owned Assets Supervision and Administration Commission chief Li Rongrong said Wednesday.
Li also told SOEs to limit their investment scale to reduce risks and said mergers and acquisitions in SOEs should be strictly controlled, according to Shanghai Securities News Wednesday.
The SOEs owned by the central government should have a "reasonable" debt ratio while self-owned capital should be no less than 40 percent in any investment, said Li.
Also, SOEs should closely monitor all investment and limit non-core and high-risk projects.
After the Beijing Olympics, the commission will strengthen the restructure among centrally administered SOEs.
"Centrally administered SOEs should definitely be industry leaders, at least ranking among the top six in their field," Li said. "Those who fail to meet the standard will be restructured."
The centrally administered SOEs include China's largest oil producer PetroChina Co and Baoshan Iron & Steel Co.
After consolidation in the past few years, the number of such SOEs has been cut to 149 from 196.
In the first half, the sales revenue of China's centrally administered SOEs jumped 25.7 percent to 5.77 trillion yuan (84.6 billion U.S. dollars). The growth was 5.4 percentage points higher than the same period last year.
Profit of these SOEs, however, was down 10.3 percent year-on-year to 425.6 billion yuan in the first half.
Li demanded SOEs pay close attention to cost and risk control as well as fund management and to weather challenges such as weaker external demand, stronger yuan and surging prices of primary commodities. (Source: Shanghai Daily)

China: Govt unmoved by slow exports(2008/7/24)
        BEIJING, July 23 -- The Ministry of Commerce remains optimistic about trade for the rest of the year and will maintain the policies adopted in the beginning of the year despite widespread concerns over the export slowdown, according to the vice-minister of commerce.
The current trade figures are within the government's expectations, and the export slowdown is the result of trade policy adjustments initiated earlier this year, Vice-Minister of Commerce Gao Hucheng said.
The growth rate of exports slowed to 21.9 percent for the first half, compared with the 27.6 percent increase over the same period last year. Exports for June alone went up only by 17.6 percent, much slower than the 28.1 percent rise in May.
Despite these figures, Gao said the Ministry of Commerce remains optimistic about the outlook in the second half of the year. "We estimate exports will maintain reasonable growth," said Gao. "The trade balance has improved, in accordance with our goals at the beginning of the year."Trade balance and a structural adjustment of exports have been on the agenda of macro control measures initiated this year, and the recent trade data show these measures have started to work, said Gao.
Figures of the first half show imports rose rapidly and composition of the export basket changed. In contrast with the export slowdown, imports went up 30.6 percent. Export of electronic and machinery products, which takes up over half of the overall exports, jumped 25.3 percent to $389 billion. Export of hi-tech products also increased rapidly, up 21.8 percent, to $196 billion.
Export growth of products of energy-intensive and heavily polluting industries, by contrast, slowed down 16 percent.
Although export slowdown in some sectors have raised the specter of bankruptcy and rising unemployment, Gao said the trade policy would remain stable and the government's stance of reining in energy-intensive and heavily polluting enterprises would not change.
In June, export of garment and accessories slowed down by 15 percent to $9.8 billion, the lowest monthly increase this year. Export of garments for the whole year went up by only 3.4 percent to $49 billion.
Apart from the tightening policies, causes for the slowdown also include a faster appreciation of the yuan against the US dollar, which has made Chinese products more expensive, and the rising raw material and labor costs.
A US-led slowdown of the global economy has also cost Chinese exporters dear.
As a result, over two-thirds of textile enterprises are suffering losses. The average profit rate in the industry for the first five months of the year was only 1.1 percent, according to the Ministry of Commerce.
Enterprises are therefore seeking favorable government policies in these sectors. Some suggest a slower yuan appreciation or increased export tax rebate. A proposal by China National Textile & Apparel Council to the State Council reportedly seeks more export tax rebate on some textile products.
Top leaders, including Vice-Premier Wen Jiabao and Commerce Minister Chen Deming, have visited enterprises in Zhejiang and Jiangsu, both major textile export bases. Many see in these visits seeds of a possible policy change for the rest of the year.
"We'll continue to clamp down on energy-intensive and highly polluting industries, and will further investigate and evaluate the difficulties faced by some industries," said Gao when asked whether the tax rebate would be increased.
(Source: China Daily)

Chinese banks' assets up 19% to $8.5 trillion in June(2008/7/23)
        (Xinhua) -- The total foreign and domestic currency assets of Chinese financial institutions rose 19 percent year-on-year to 57.7 trillion yuan (8.45 trillion U.S. dollars) in June, the China Banking Regulatory Commission (CBRC) said on Monday.
The CBRC also said that combined liabilities rose 18.4 percent from the same period last year to 54.4 trillion yuan.
Liabilities of state-owned commercial banks were 28.4 trillion yuan as of June, up 13.7 percent, while those of joint-stock commercial banks were 7.7 trillion yuan, up 25.2 percent.
The bad loan ratio among major commercial banks fell to 6.1 percent as of June 30 amid efforts to enhance risk control, 0.62 percentage point lower than at the beginning of this year.
Banks should further improve risk prevention and boost capital adequacy in the second half, CBRC chairman Liu Mingkang said over the weekend.

China to enhance foreign investments management, regulate forex inflow(2008/7/22)
        BEIJING, July 19 (Xinhua) -- China will further strengthen management of foreign investment projects and check foreign exchange inflow in a bid to better control it, according to the country's top economic regulator.
The move will also safeguard the country's economic safety, protect ecological environment, optimize develop and reform mechanism, and prevent industrial monopolization, said the National Development and Reform Commission (NDRC) in a circular on Friday.
Projects that are not approved by the government, provide fake application materials, or use foreign exchanges improperly, will be punished.
Local governments will also investigate and supervise foreign enterprise-involved programs, including joint ventures, exclusively foreign-owned firms, bilateral cooperation projects, mergers and acquisition programs.
Meanwhile, regional economic regulators should look at the projects, monitor foreign exchange inflow channels, and enhance finance management of foreign enterprises.
Projects with severe environment contamination, high energy consuming, high resources consuming need stricter inspection and supervision.
China's cumulative foreign exchange reserve stood at 1.809 trillion U.S. dollars by the end of June, up 35.73 percent year on year, while foreign direct investment (FDI) rose 45.6 percent to 52.4 billion U.S. dollars in the first half from a year earlier.

China's fixed assets investment expands 26.3% in 1st half(2008/7/21)
       (Xinhua) -- China's fixed assets investment in the first half of 2008 rose 26.3 percent from a year earlier, up 0.4 percentage points from the same period of last year, the National Bureau of Statistics (NBS) said Thursday.
The overall investment in assets stood at 6.8402 trillion yuan (1.0059 trillion U.S. dollars) in the first half of this year, said the NBS.

China's CPI rises 7.9 percent in first half of 2008(2008/7/18)
       (Xinhua) -- China's consumer price index (CPI),the main gauge of inflation, rose 7.9 percent in the first half over the same period last year, 0.2 percentage points lower than the first five months, the National Bureau of Statistics said on Thursday.
The figure, compared with 7.1 percent in June, 7.7 percent in May, 8.5 percent in April and a 12-year-high of 8.7 percent in February, was broadly in line with most forecasts.
The prices rose by 7.6 percent in cities and 8.6 percent in rural areas. Grouped by commodity categories, prices for food rose 20.4 percent, contributing 6.64 percentage points to the overall CPI rise and prices for housing were up 6.9 percent, contributing 1.02 percentage points.
Prices for other categories of commodities rose or dropped slightly.
Yao Jingyuan, chief economist of the bureau, attributed the slowdown of CPI growth to the government's efforts to curb inflation.
The government has introduced a wide-range of measures, including increased fiscal support for grain and food production, and raised the required reserve ratio for commercial banks. But the central bank has not raised interest rates to rein in investment growth so far this year.
　　RISING PPI
Despite a drop in the CPI growth, the producer price index (PPI), which measures the value of finished products when they leave the factory, rose 7.6 percent during the first half, said the bureau.
The growth rate was 4.8 percentage points higher than the same period last year. The PPI rose 8.8 percent in June from a year earlier, compared with 8.2 percent in May.
Meanwhile, the purchaser prices for raw materials, fuel and power rose 11.1 percent. The growth rate was 7.3 percentage points higher than a year earlier.
Li Xiaochao, spokesman of the bureau, said the rising PPI imposed greater pressures on inflation and the latest oil and power price rises could add to the pressure.
EXPORT GROWTH DOWN, FDI UP
During the first half, the value of exports was 666.6 billion U.S. dollars, up 21.9 percent. The growth rate was 5.7 percentage points lower than the same period last year.
"Many export-oriented companies could face increasing pressures in the second half of this year due to uncertainties in the global economy," said Zhang Liqun, a macro-economist at the Development Research Center of the State Council, the Cabinet.
The country had a trade surplus of 99 billion U.S. dollars, a decrease of 13.2 billion U.S. dollars over the same period last year.
The total value of foreign direct investment (FDI) actually utilized was 52.4 billion U.S. dollars, up 45. 6 percent. The growth was 33.4 percentage points higher than a year earlier.
By the end of June, the foreign exchange reserves stood at 1,808.8 billion U.S. dollars, up by 35.7 percent.
PROBLEMS REMAIN
Inflation was expected to slow in the second half, but China should remain vigilant against high inflationary pressure due to rising prices of commodities and oil on the global market, Yao said.
The bureau said in a statement that outstanding problems existing in economic performance included persisting pressure for rapid price rises, factors to constrain steady agricultural production and raise the income of rural residents, and the severe international financial situation.
"We must continue to curb inflation," the spokesman said.
He said many countries, both developed and developing, suffered rising inflation in the last two months. Globally, prices of primary products, such as oil and grain, had risen more than 30 percent. Energy prices continued rising in June with coal up 19.9 percent and oil 7.2 percent.
"With the further opening-up of Chinese economy, we are more vulnerable to international factors," Li said.
He also said the post-quake reconstruction would drive up demand on building materials, which could contribute to CPI rises.
"The government should continue encouraging the industrial transfer from the economically developed eastern region to the less developed central and western regions to help ease the pressure of rising production costs for labor-intensive industries," he said.
"Meanwhile, it must further the reform of energy pricing to help solve the shortage of coal, power and oil," said Zhu Hongren, deputy director of the Bureau of Economic Operations with the National Development and Reform Commission.

China's GDP up 10.4 percent in first half year(2008/7/18)
       (Xinhua) -- The Chinese economy is in a dilemma, struggling for a delicate balance between maintaining a healthy growth and taming inflation. The major economic indicators released Thursday dampened expectations for a shift in the nation's macro control polices, but some, manufacturers in particular, still call for a fine tuning.
China's gross domestic product (GDP) grew 10.4 percent to 13.06trillion yuan (1.9 trillion U.S. dollars) in the first half over the same period last year, the National Bureau of Statistics (NBS)said on Thursday.
The growth rate was 1.8 percentage points lower than the first half last year, or 0.2 percentage points lower than the first quarter of this year.
The GDP included 1.18 trillion yuan generated by the primary sector, up 3.5 percent, 6.74 trillion yuan by the secondary sector,up 11.3 percent, and 5.14 trillion yuan by the tertiary sector, up10.5 percent. The growth rates were 0.5 percentage points, 2.4 percentage points, and 1.6 percentage points, respectively, lower than the first half last year.
The bureau's chief economist, Yao Jingyuan, said the double-digit GDP growth indicated China's economy was still growing at a steady and relatively fast pace.
"The cooling of GDP growth indicated the government's macro-economic policy to prevent the economy from overheating has paid off," said Yao.
Last year, GDP grew 11.4 percent year-on-year with the risks of spiraling inflation and economic overheating rising. To cool the breakneck growth, China fixed its GDP growth target at 8 percent for 2008.
The slowing world economy and weaker demand on international markets also adversely affected the economy, Yao added.
NBS spokesman Li Xiaochao said on Thursday that the economic growth was "in line with macro-economic control targets" and was "achieved with painstaking efforts".
GDP grew by 11.3 percent in the fourth quarter last year, 10.6 percent in the first quarter this year and 10.1 percent in the second quarter.
"China avoided major ups and downs in economic growth in the first half of the year, with growth slowing steadily," said Li.
With on-going industrialization and urbanization, China's economy would remain robust and vigorous, as the need to narrow regional disparities would continue providing opportunity for growth, according to Li.
However, observers said the Chinese economy was still beset with problems, citing persistent price rises, uncertainties in demand abroad, squeezed corporate profit margins, difficulty in ensuring energy and power supplies, and undue expansion of foreign exchange reserves.
Early July found Premier Wen Jiabao, Vice President Xi Jinping and Vice Premier Wang Qishan conducting field inspections on the economic situation in developed Jiangsu, Shanghai, Shandong and Guangdong. The frequency of such high-profile, on-the-spot researches by Chinese leadership in a short period of time has seldom been seen over the past 30 years. Observers believed this implied the grimness of the internal and external environment of the Chinese economy.
SHADOW OF SLOWDOWN
According to the national statistical bureau, fixed-assets investment nationwide amounted to 6.84 trillion yuan in the first half of this year, up 26.3 percent year-on-year. The growth rate was 0.4 percentage points higher than the year-earlier level.
The total included 5.84 trillion yuan in urban areas, up 26.8 percent, and 996.6 billion yuan in rural areas, up 23.2 percent. The growth rates were 0.1 percentage points and 1.7 percentage points, respectively, higher than the year-earlier level.
Retail sales stood at 5.1 trillion yuan nationwide, up 21.4 percent. The growth rate was 6 percentage points higher.
The total included 3.48 trillion yuan in urban areas, up 22.1 percent, and 1.62 trillion yuan in rural areas, up 20.0 percent.
Zhuang Jian, senior economist with the Asian Development Bank PRC Resident Mission, attributed the faster growth in consumption to expectations for future higher income of workers and more allowances for low-income earners upon enforcement of the new labor contract law and efforts by local governments to raise welfare for the needy.
But the higher income would also affect the economy adversely, as it would translate into higher labor cost for enterprises. This will add pressure on corporate performance, which was already not so upbeat in the first half, some economists believed.
Between January and June, major enterprises nationwide posted a16.3 percent growth in their value-added output, down 2.2 percentage points.
According to the statistical bureau, the major loss-making industrial enterprises nationwide recorded 91.7 billion yuan in losses in the January-June period, up 56.1 percent on the same period of last year. The growth was nearly 50 percentage points higher than the year-earlier level.
Major industrial enterprises reaped 1.09 trillion yuan in profits in the first five months of the year, up 20.9 percent year on year. The rate fell 21.2 percentage points from a year ago.
Observers saw this as a signal for possible further economic slowdown. They considered employment targets would, more or less, increase corporate payrolls and enterprises' overall costs.
In the first half year, 6.4 million people were added to employees nationwide, or 64 percent of the yearly target of 10 million which was more than the nine-million level set for each of the past few years.
Moreover, the observers argued, foreign sales remained worrisome, although the other two of the three major driving forces of the Chinese economy -- investment and domestic consumption, were brisk over the past six months.
The first-half foreign trade was 1.23 trillion U.S. dollars, up25.7 percent. The total included 666.6 billion dollars in export value, up 21.9 percent, and 567.6 billion dollars in import value, up 30.6 percent. The growth rate for export was 5.7 percentage points lower. The trade surplus decreased 13.2 billion dollars to 99 billion dollars.

The slower growth of foreign sales was ascribed to ebbing demand abroad, which will remain uncertain for the coming months as concerns are mounting about credit risks in the U.S. financial regime. The credit risks have helped drive the U.S. economy down and many related economies worldwide into stagnation.
Traditional manufacturing sectors, which had lower added value, bore the blunt in global price rises for raw materials, increasing labor cost and expediting the appreciation of the Chinese currency (which gained more than 7 percent against the U.S. dollar, in comparison with the 6.9 percent gain for whole of last year).
For example, China exported 9.87 billion U.S. dollars worth of garments and accessories in June, down 15 percent from the same month last year. The clothing exports for the first six months went up only 3.4 percent to 49.96 billion dollars.
Besides, Zhu Baoliang, deputy head of the economic prediction department of the State Information Center, said that the gloomy equity market at home would make it more difficult for enterprises. He added that more slowdown risks would lie in the possible outward flow of international short-term speculative funds.
LINGERING INFLATIONARY PRESSURE
China's consumer price index (CPI), a major inflation measurement, rose 7.9 percent in the first half year.
Over the past 30 years, China experienced four major periods of inflation and one serious deflation. The highest CPI rise was 24.1percent in 1994. All of past major inflations were triggered mainly by domestic factors only. But this time, most experts believed, the inflation was ignited by external factors and was cost-driven.
Though the Janunary-June index was lower than the 11-year-high 8.7 percent for February, the inflationary pressure would remain in the coming months, many believed.
The fast growth of PPI, which measures the value of finished products when they leave the factory, will affect the CPI a few months later.
Price rises for oil and farm produce worldwide would likely continue and shore up China's inflation, as the Chinese economy's reliance on the outside world is now more than 60 percent thanks to its 30-year-long opening-up.
Meanwhile, prices of agricultural products at home, which were buoyed up by short supplies after the severe winter weather and the May 12 earthquake, will linger at a high level.
The rapidly expanding foreign reserves, which pushed up the central bank's passive money supply, will add to the inflationary pressure.
China's forex reserves, which is already the world's largest, stood at 1.81 trillion U.S. dollars at the end of June, including280.6 billion dollars increased in the past six months, with an average monthly increment of 46.8 billion dollars.
Observers warned of an inrush of huge short-term speculative funds as the fast expansion was achieved in company with a slowdown in trade surplus growth.
FINE TUNING SUGGESTED FOR MACRO CONTROL POLICIES
China has undergone several major economic ups and downs since it started reform 30 years ago. Each of them was triggered by overheating, partly resulting from decentralization, or pricing policy shifts or forex system reform.
Among ensuing macro controls, the one in the 1984-1986 period was given up halfway and that in the 1989-1990 period caused a hard landing. The macro control drive in the 1993-1996 period ended up with a relatively serious deflation, because no timely turnaround was achieved for then tight monetary policy.
Early this year, Premier Wen Jiabao said 2008 would probably be the most difficult year for the Chinese economy. Given so many uncertainties, it would be hard for the central government to make decisions, he noted.
This week, the financial and economic committee of China's top legislature decided to adhere to the tight monetary policy and prudent fiscal policy, with efforts focusing on avoiding major economic ups and downs. They agreed the current economic situation was good, putting taming inflation high on the development agenda.
Some experts warned that post-disaster reconstruction, if out of control, would also possibly re-ignite overheating.
Ba Shusong, deputy head of the research institute of finance under Development Research Center of State Council, said given the combination of various pressures at home and abroad, it was unsuitable to loosen the tight monetary policy for the time being. It was necessary for the fiscal policy to function more actively to ensure appropriate economic growth.
Wang Tongsan, economist with the Chinese Academy of Social Sciences, said that price control would still remain an important part of China's economic policy, and that measures must be taken against the potential of inflation.
Some suggested the export tax rebate policy should be readjusted to bail out the struggling manufacturers, those in the textile sector in particular.

Rising FDI reflects inflow of hot money(2008/7/17)
       Foreign direct investment (FDI) in China rose 45.5 percent in the first half of the year, deepening worries that the inflow of "hot money" could lead to higher inflation.
The Ministry of Commerce said on Friday that foreign investors spent 52 billion U.S. dollars in China between January and June. In the same period last year, FDI increased only 12 percent.
The ministry did not provide figures for June, but based on data published for the first five months, the June figure is estimated at 9.6 billion dollars, up from 6.6 billion dollars a year ago.
Gene Ma, macroeconomic analyst at Beijing-based economic research firm China Economic Business Monitor, said: "The inflow increase is fast, but we don't know where the money has gone."
Despite rising FDI, foreign investment in fixed assets and the real estate sector both fell over the first five months of the year, and no major merger and acquisition deals were signed. Therefore, the destination of a large part of the money inflow cannot be explained, he said.
Analysts have said the rising yuan against the U.S. dollar and high interest rates in China have attracted the hot money.
The central bank said in its first-quarter monetary policy report that given the interest rate gap between China and the U.S., and the uncertain global economic situation, the influx of speculative capital may continue to increase in the short term, compromising the country's tightening monetary policy.
Shi Lei, an analyst at Bank of China, said FDI has been one of the major channels for hot money influx since last year.
"Speculators can always find a way to circumvent government rules," Shi was quoted by Bloomberg as saying.
The government has been working to stop the inflow of hot money.
The State Administration of Foreign Exchange issued a new rule last week, which asks traders to report advance payments for exports and deferred payments for imports, because both of these channels can be used to bring in "hot money." (Source: China Daily)

China's economy set to face bumps from various tests(2008/7/16)
       The Yangtze Delta and Pearl Delta regions have shown signs of an economic slowdown and some economists said China's economy may face a bumpy road because of various challenges.
They made their comments before China is set to release economic data for the first half of the year on Thursday.
Hu Chunli, a researcher with the State Information Center, said the advantages of low labor and raw material costs were disappearing in China's coastal cities and this erosion made it harder for businesses there to grow.
Export-oriented firms in these cities suffered more from the appreciation of the yuan.
According to the latest data released by the National Development and Reform Commission, China's eastern areas grew 15.71 percent from January to May, the lowest compared to the western, northeastern and the middle regions of China's mainland.
The growth of the eastern areas also posted the sharpest slowdown of all the regions, with the pace moderating 3.1 percentage points from a year earlier.
Meanwhile, Hu said tight credit control prevented small and medium-sized companies from getting finance for further development.
Yu Bin, director of the macroeconomic research department of the Development Research Center under the State Council, said the United States credit crisis, natural disasters, the unstable performance of China's securities and real estate markets as well as the surging costs of production, made it possible that the nation's economy may experience a sharp slowdown this year.
"Considering the combination of all these factors, China's economy may face a sharp slowdown. It may feel like a sudden braking and the engine may not be easy to restart," the National Business Daily said yesterday, quoting Yu speaking at a forum in Beijing.
China's economic growth will likely moderate to 9.8 percent in 2008 from last year's 11.9 percent, the World Bank predicted in its latest China Quarterly Update last month.
But the World Bank was generally positive about China's economy as real growth of exports and imports remained robust despite economic activity in the country moderating in line with the global economy's slowdown.
In the first half of the year, China's trade surplus reached 99 billion U.S. dollars, a decline of 11.8 percent from a year ago as export growth slowed while imports expanded faster.
(Source: Shanghai Daily)

Officials: China should strive for bigger voice in global economy(2008/7/15)
       (Xinhua) -- Wan Jifei, president of China Chamber of International Commerce said on Wednesday that the country needs to participate in the formulation of global economic and trade rules apart from taking part in international division of labor and competition.
Wan, also chairman of the China Council for the Promotion of International Trade, said at a chamber meeting that with Chinese companies getting stronger capabilities and the country having increasing influence globally, to get a bigger voice is conducive to protecting the legitimate interests and rights of domestic enterprises.
Zhang Yanling, vice president of the Bank of China, said China is engaged closely with foreign countries economically and the scale of trade and labor service export is keeping on growing.
Zhang added that Chinese companies should not only be familiar with existing international rules, but should also play an active role in setting up these rules and voice their opinions in international economic arena.

Report: China CPI to rise 7.2% in 2008(2008/7/11)
       BEIJING, July 10 (Xinhua) -- China's consumer price index (CPI),the main gauge of inflation, is expected to rise 7.2 percent year on year in 2008, according to a Bank of China (BOC) report on Wednesday.
The report, released by the lender's global financial market department, suggested the central government adopt more tightening monetary policies to further tame inflation, drain liquidity and curb excessive investment.
China had been under inflationary pressure this year as the CPI increased 7.7 percent in May from the same month last year. The figure was 8.5 percent in April, up from 8.3 percent in March and near the 12-year high of 8.7 percent in February.
The producer price index, another measure of inflation, accelerated to 8.2 percent in May after gaining 8.1 percent in April, according to the National Bureau of Statistics.
The BOC predicted in an earlier report CPI in 2008 would increase 6.8 percent year on year. However, the report said "Rising prices of gasoline, coal oil and electricity will push up the previously estimated figure."
China's National Development and Reform Commission had raised the price of refined oil by 1,000 yuan per tonne as of June 20.
The report advised the government raise interest rates and reinin appreciation of the yuan, the country's currency. China was very likely to raise interest rates in the fourth quarter, it said.
The central parity rate of the yuan, or renminbi (RMB), was set at 6.8489 yuan on Thursday against the U.S. dollar, since the country un-pegged its currency from the greenback in July 2005.
The yuan has risen more than 6.65 percent against the U.S. dollar so far this year, in comparison with the 6.9 percent gain last year, and has broken its own record value 52 times.
"A slower appreciation in the currency will help to make full use of the domestic labor force, which is China's most sufficient resource," the report explained.
It also forecast inflation might show a deceleration in June as food, vegetables and fruit prices dropped. The CPI was expected to rise 7.3 percent in June year on year.

China's consumer confidence index shrinks in Q2(2008/7/10)
        (Xinhua) -- China's consumer confidence index dropped in the second quarter, reflecting an expected cool down in the country's economy.
The index fell 0.7 percentage points from the previous quarter to 94.1, said the National Bureau of Statistics (NBS) on Wednesday.
The index was also 2.7 percentage points lower than in the same period last year.
The Index, which measures consumers' outlook toward employment, the economy, regular income, stock market and quality of life, was released following the disclosure of a slightly lower entrepreneurial confidence index and a lower business climate index, both year-on-year figures for the second quarter.
China's business climate index dropped 8.6 points to 137.4 points from last year's second quarter, while the entrepreneurial confidence index dipped 8.3 points to 134.8 from the same period last year.

Chinese entrepreneurs less confident in Q2(2008/7/9)
        BEIJING, July 8 (Xinhua) -- China's entrepreneur confidence index dipped 8.3 points to 134.8 in the second quarter from the same period last year, said the National Bureau of Statistics on Tuesday.
The index, a gauge of the understanding, views and projections of entrepreneurs, was 5.8 points lower than that in the first quarter.
"The entrepreneurs' weaker confidence mirrors the current macro-economic condition, as growth is slowing down," said Guosen Securities analyst Lin Songli. "It also shows their anticipation of future developments."
The figure followed Monday's release of China's business climate index, a key gauge of corporate performance, which dropped8.6 points to 137.4 points in the second quarter from the same 2007 period.
Deputy Director Cai Zhizhou of China Center for National Accounting and Economic Growth, Peking University, attributed the climate index drop to rising costs of land, labor and energy resources, plus tightened credit.
The value of China's exports in the first five months rose 22.9percent from the same period last year. The growth rate was 4.9 percentage points lower than that of the first five months of last year.
The growth rate of urban fixed-asset investment in January-May also fell 0.3 percentage points year on year.
Social service sectors, such as banking, insurance, water and power supply, saw the biggest slip in entrepreneur confidence in the second quarter. Lodging and eatery industries posted the second biggest slump.
Entrepreneurs in mining sectors were the most confident, with their index at 169 points, followed by the information and software businessmen.
Meanwhile, entrepreneurs in the real estate industry posted the lowest confidence index of 118.4 points.
Those in large-sized enterprises had more confidence than those in small and medium-sized ones, with the indices for them standing at 149.9, 125.3 and 118 points respectively.
The figures were based on a survey of 19,500 companies nationwide.

China's business climate index continues to drop in Q2(2008/7/8)
       (Xinhua) -- China's business climate index, a key gauge of corporate performance, continued to drop year on year in the second quarter despite a slight recovery from the first quarter, Monday official figures showed.
The index, based on a survey of 19,500 Chinese firms, rose to 137.4 points in the second quarter from 136.2 in the first quarter, but 8.6 points down from last year's second quarter, said the National Bureau of Statistics.
Rising costs of land, labor and energy resources, accompanied by tightened credit, contributed to the index fall, said Deputy Director Cai Zhizhou of China Center for National Accounting and Economic Growth, Peking University.
"Pressured by higher costs and fund restraints, Chinese enterprises are going though a transition period," he said.
Cai said it was urgent for the enterprises to change the development mode relying on high energy and resource consumption.
Large-, medium- and small-sized enterprises all reported declining climate indices from last year's first quarter. Their second-quarter levels were 155.9, 125.3 and 115.7 points, respectively.
Information technology and software sectors continued to post a higher climate index, which rose 4.4 points to 162.9 from the same period last year.
Compared with the first quarter, industrial companies gained 2.4 points to 135.7, construction went up to 144.2 points, while the real estate stayed at almost the same level at 131.8 points.
Wholesale, retail, transport, hotel and eatery sectors all fell from the first quarter.
"The index was a natural reflection of the slower economic growth," said Cai.
China's gross domestic product in the first quarter rose 10.6 percent year-on-year, but the growth rate was 1.1 percentage lower than a year earlier.
The business climate index, with the 100-point mark as the mark between depression and prosperity, tumbled to 116.6 points, its lowest level since the outbreak of SARS in 2003. It has since stayed above 130.

Oil prices settle record above 145 U.S. dollars(2008/7/7)
      NEW YORK, July 3 (Xinhua) -- Crude futures surged and settled above 145 U.S. dollars a barrel for the first time Thursday after a rising dollar did not ease much of the investors' concern about supplies.
Light, sweet crude for August delivery rose 1.72 dollars to settle at a new record of 145.29 dollars a barrel on the New York Mercantile Exchange. In the early morning electronic trading the contract hit an all-time peak of 145.85 dollars a barrel.
Oil's Thursday rally was believed to have been driven by Wednesday's report of a bigger-than-expected drop in the U.S. crude stockpiles and the lingering concerns about the tension in the Middle East.
But the price hike eased after the dollar gained strongly against the euro. The European Central Bank (ECB) raised interest rate by a quarter point on Thursday. As the decision was long expected by the market, and the ECB played down prospect of further rate increase, the euro fell sharply against the dollar.
In London, Brent crude for August delivery hit a record of 146.69 dollars a barrel before settling up 1.82 dollars at 146.08 dollars a barrel on the ICE Futures Exchange.

State firms seek global talent(2008/7/4)
      BEIJING, July 3 -- China will start a new round of talent recruitment globally to find 16 senior managers and chief accountants for its elite State enterprises.
The State-owned Assets Supervision and Administration Commission (SASAC), which represents the State in more than 150 major State enterprises, will announce its recruitment plan next Tuesday.
The commission will look for three general managers, 10 deputy heads and three chief accountants for 16 major enterprises in a variety of sectors, such as power generation, electronics, chemical and trade. Some firms, such as Baoshan Iron and Steel Co, and FAW, China's top automaker, are among the world's top 500 enterprises.
The SASAC said it would establish overseas recruitment centers to save costs for applicants that it is looking to lure to China.
General managers are sought for the China Electronics Corporation, Harbin Power Equipment Corp and Macao-based Nam Kwong Group. It is the first time that the SASAC will openly recruit senior managers for Macao-based State enterprises.
Applicants must have at least a bachelor's degree and candidates applying for general manager roles must be under 50, the SASAC said. Only the "exceptionally competent" over-50s will be considered for these positions but even they must be under 53.
The SASAC started to openly recruit senior management for major State enterprises in 2003 and has hired 91 high-ranking managers since. "It (open recruitment) has created a sound environment for qualified managers to stand out," Li Rongrong, head of SASAC, said at a June 26 meeting.
"Such a way of recruitment will encourage competition and help improve management efficiency in State enterprises," said Han Meng, researcher with the Institute of Economics of the Chinese Academy of Social Sciences.
China's State enterprises used to be criticized for being slow to market changes - a legacy of the planned economy era. Top managers, many of whom appointed by higher authorities, are often thought as officials who lack some of the skills needed in corporate management.
But since China has adopted the market-based economy, the SASAC has tried to introduce modern corporate governance into State enterprises by helping them establish board of directors and supervisors and by making their managers more professional and better suited to manage the country's approximate 30 trillion yuan worth of State assets.
"The SASAC's recruitment process is open and market-based, which will be conducive for corporate governance," Han said.
The age limit for candidates points to the philosophy and commitment in seeking out young talent, which is a trend in China, he added.
The recruitment announcement will be published on the official website of SASAC, China Daily and other major media outlets. The application deadline is August 6.
(Source: China Daily)

China's economy set to cool, official index chart indicates(2008/7/3)
       BEIJING, July 1 (Xinhua) -- China's economy had been slowed to expand at a more desirable and moderate rate for the five months to May, according to an official macro economy index chart, the national statistics agency said on Tuesday.
The macro economy index chart, filed by the National Bureau of Statistics (NBS), showed the latest figure for May was 113.3, the same as the previous four months, making a row of "green lights".
This compares to a high of around 120 from September to December last year when the macro economy lit up "yellow lights" to signal overheating risks. The ideal figure set by the bureau is 100.
The four months of "yellow lights" prompted the government to adjust macro controls with tighter monetary policies to avoid an overheating economy at the end of last year.
"The country's macro control measures played a significant rolein reversing the overheating trend," said Zhang Liqun, a macro-economist at the Development Research Center of the State Council.
The chart also revealed the country's consumer price index, a key indicator of inflation, had signaled "yellow lights" for nine months since September, indicating lingering inflationary pressure.
The May index forecasting economic growth, according to the chart, fell 0.15 points from April to 102.35, showing the economy may further cool.
Deputy head of the NBS Xie Hongguang said on Tuesday that China's economy might continue to decelerate as a result of slowerindustrial output growth and weakening overseas demand, and domestic inflation remained a big problem.
However, the national economy remained robust, though its growth slowed to 10.6 percent in the first quarter, down 1.1 percentage points from a year earlier, Xie said.
Zhang was also optimistic about China's economy, saying, "The economy, though cooling, maintained a rapid growth, and the country's outlook on investment, consumption and exports remained positive."
Economists believe a 9 to 10-percent growth rate was most desirable for China's economy, and the growth would slip from lastyear's 11.9 percent to stand at around 10 percent this year.
Fan Jianping, chief economist of the State Information Center, put China's economic growth at 10.3 percent for 2008, the China Securities Journal reported on Tuesday.

Official: China should boost development of long-term financing market(2008/7/1)
       (Xinhua) -- China must boost the development of a medium and long-term investment and financing market to build a highly efficient financial system, according to Chen Yuan, governor of China Development Bank.
Chen said Friday at the 6th China M&A Annual Conference held in Shanghai that a medium and long-term investment and financing market is one pillar of the financial system and an important fund channel for local economic development and large-scaled enterprises.
"As a developing country, China's urbanization would last for more than 100 years," said Chen, adding that long-term construction needs huge capital input.
Meanwhile, he urged that in building such a market, the government, market and financial agencies should collaborate closely. Financial institutions need to improve their competitiveness by strengthening internal risk control and relying on good services and innovation.
Cui Jindu, vice mayor of Tianjin Municipality, said at the conference that China needs to push forward financial innovation in face of global financial uncertainties, adding that if China did not take an active role in the process of financial globalization, more risks would be involved.

China's industrial profits soar 20.9% in 1st 5 months (2008/6/30)
       (Xinhua) -- China's industrial firms reported 1.09 trillion yuan (158.6 billion U.S. dollars) in profits in the first five months of this year, up 20.9 percent from the same period last year, the National Bureau of Statistics (NBS) said on Friday.
The growth rate was 4.4 percentage points higher than figure for January and February, but 21.2 percentage points lower than the first five months of last year.
The NBS statistics covered the profits of major industrial enterprises defined as those with more than 5 million yuan in revenues from their main business annually.
The NBS said the profits of state-owned industrial companies only rose 1.5 percent to 424.6 billion yuan, largely affected by the weak energy and oil refining sectors.
Power utilities' profits fell 74 percent year-on-year. Oil refineries and coking plants moved to a loss of 44.3 billion yuan from a profit of 35.2 billion yuan at the same time last year.
But other sectors, including oil, gas, coal and construction material production, saw profits surge more than 50 percent. Profits of steel companies rose 25.6 percent and those of chemical plants rose 26 percent.
The NBS also reported profits for privately-owned industrial firms were up 51 percent and foreign-funded companies up 22.4 percent.

Central bank economist: China set for 30 more years of fast growth(2008/6/27)
      China's economy will grow rapidly during the next 30 years, despite a slight slowdown at present, Fan Gang, a well-known economist and member of the Monetary Policy Committee of the People's Bank of China (PBOC, the central bank) told an economic forum here on Wednesday.
Higher productivity had been a major factor in China's economic growth and would continue to play a role in the coming decades, Fan said.
Delivering a review of three decades of reform and opening up policies that were instituted in 1978, Fan said market-oriented reforms, education and research, opening to foreign investment and urbanization had helped drive productivity growth.
"The effects of those factors will persist in the next 30 years. That's why I'm confident" of China's continued growth prospects, he said.
Rising productivity had contributed about 40 percent of China's average annual 9 percent growth from 1999 to 2005, with investment and human capital accounting for the remainder, said Fan.
Although labor might become scarcer and costlier over the next three decades, the delayed effect of education and research would play a bigger role, he said.
"The share of foreign investment in total investment is dropping, but the knowledge China gained from foreign-funded enterprises will be of more use in the future," said Fan.
Fan didn't give specific figures on the changing relationship between foreign and domestic capital, and the government doesn't break down total investment in that manner.
Meanwhile, there was still much room for further reforms in government efficiency, state-owned enterprises, pricing mechanisms and the financial and tax systems, which could unleash further economic dynamism, Fan said.
"China has finished only half or less of its reform journey," he said.
Gross domestic product (GDP) expanded 11.9 percent last year, the fifth year of double-digit growth. However, GDP grew 10.6 percent in the first quarter, down 1.1 percentage points year-on-year, on weakening external demand and the worst winter storm in more than five decades.
"Growth only slowed a little; [the economy] was not in stagnation. It was still running at double-digit speed," China Business News quoted Fan as telling reporters at the forum.
A report released by Renmin University of China and Donghai Securities earlier this week said the economy was decelerating from a record growth pace.
It forecast the economy would grow at a slower annual rate of 10.4 percent in 2008 because of the deteriorating external environment and the domestic tightening policy.
The World Bank last week raised its forecast for China's 2008 economic growth to 9.8 percent from 9.4 percent, down from the 10.8 percent forecast made in mid-2007.

China to rein in ripple effect of energy price increases(2008/6/26)
        China's top economic planner is to control the spread of price increases after it lifted fuel and electricity prices on Thursday, seeking to avoid fanning inflation.
Local price regulators were urged to tighten price monitoring and control the price increases of other industrial products, the National Development and Reform Commission (NDRC) said in a statement on Saturday.
Producers were encouraged to cut production costs instead of rising prices, said NDRC. It also suggested local government should reduce administrative fees paid by producers.
NDRC raised the retail prices of gasoline and diesel oil by 1,000 yuan (144.9 U.S. dollars) per tonne, effective on Friday, with the price of aviation kerosene up by 1,500 yuan per tonne.
Retail electricity price will be raised by 0.025 yuan per kwh starting from July 1. Prices directly related to people's livelihoods, however, remained unchanged, including public transport, taxis and household electricity.
NDRC required all departments concerned to firmly stick to the price adjustment policies and said those who illegally jacked up prices would be punished.
Many economists worried that the price increases might fuel inflationary pressure, which showed signs of easing last month.
The consumer price index (CPI), a main gauge of inflation, eased to 7.7 percent in May over falling food prices. The reading was 8.5 percent in April, up from 8.3 in March and down from the 12-year high of 8.7 percent in February.
Before the energy price increases, market analysts were expecting the CPI to continue decelerating in June and July.
The price rises would have limited power to stoke the inflation rate, as for one thing prices directly related to people's livelihood remain unchanged, Xu Kunlin, deputy head of NDRC pricing department had said.
Cost increases for producers after the rise, however, would probably not go beyond the production sector, because of the over-supply situation of consumer products, he added.

Central bank governor signals firmer policies on inflation(2008/6/25)
       China's central bank Governor Zhou Xiaochuan said "stronger policies" may be in the pipeline to tackle inflation exacerbated by the government's latest fuel-price increases.
"Surely higher energy prices will send some pressure to the consumer price index, so we may have stronger policies against inflation," Zhou told reporters in New York last Friday before a meeting with United States business groups. But Zhou didn't elaborate.
China on Thursday raised gasoline and diesel prices by at least 17 percent to take effect from last Friday, and increased power tariffs to rein in energy consumption. Crude oil prices are 91 percent higher than a year ago. China's retail fuel prices are about half the levels of the world's benchmark, Wang Qing, chief China economist at Morgan Stanley in Hong Kong, wrote in a June 6 report.
Inflation climbed to 8.1 percent in the first five months, from 4.8 percent for all of 2007. Though inflation last month was off the 12-year high of 8.7 percent reached in February, Zhou cautioned against saying inflation will slow.
"It's hard to say whether inflation will continue to ease for the rest of the year," Zhou told reporters in Washington, after meetings last week with US Treasury Secretary Henry Paulson. "We need to closely monitor it."
Aiming to keep consumer price increases for 2008 below last year's 4.8 percent, the People's Bank of China has ordered lenders to set aside a record proportion of their deposits as reserves and increased the pace of the yuan's appreciation this year to cool price gains. Zhou has kept the nation's benchmark interest rates unchanged after six increases last year, fretting that higher rates may attract more capital inflows, Bloomberg News said.
Economic losses
China's fuel-price increases may push up inflation in the second half of this year by 0.9 percentage point, Ha Jiming, chief China economist at China International Capital Corp in Hong Kong, wrote in an e-mailed note last Thursday. Inflation may rise as much as 7.5 percent in 2008, Ha wrote, adding China's fuel prices need to rise another 60 percent to reach global levels.
On top of higher prices of gasoline, diesel, electricity and jet fuel, the central bank's job to control inflation may also be complicated by rainstorms and floods caused by more than 10 days of downpours this month in south China's provinces, the most in 100 years in some areas, and spoiling 1 million hectares of farm land. The floods caused economic losses of about 20.3 billion yuan (US$3 billion).
Zhou is among Chinese officials led by Vice Premier Wang Qishan meeting with their counterparts, including Paulson, for the semiannual China-US Strategic Economic Dialogue. The Chinese officials were in New York last Friday for a series of meetings.
(Source: Shanghai Daily)

China to raise prices of refined oil, electricity(2008/6/24)
          (Xinhua) -- China's top economic planner announced Thursday night the country will raise the prices of gasoline, diesel oil, aviation kerosene and electricity, revealing an unprecedented broad plan to raise energy prices.
Beginning Friday, the benchmark gasoline and diesel oil retail prices will be marked up by 1,000 yuan (144.9 U.S. dollars) per tonne, with the price of aviation kerosene up by 1,500 yuan per tonne.
The prices of natural gas and liquefied petroleum gas, however, would be left unchanged, according to the National Development and Reform Commission (NDRC).
The benchmark retail prices of gasoline and diesel oil would be lifted to 6,980 yuan and 6,520 yuan per tonne, up more than 16 percent and 18 percent respectively.
The price rises also translate into mark-ups of 0.8 yuan and 0.92 yuan per liter, the measurement used at service stations in China, for gasoline and diesel oil respectively.
The commission said the oil price adjustment was made to ensure supplies in the country by diminishing the gap between continuously rising international crude prices, especially since February, and state-set domestic oil prices.
Crude oil price on the international market reached above 136 U.S. dollars per barrel on Wednesday, up more than 45 percent from the price when the country raised oil prices in November last year.
The government-controlled oil prices on domestic market should be blamed for a shortfall of supplies, as some refineries stopped or cut back on processing to avoid losses, said an unidentified NDRC official.
The commission said more subsidies would be offered to farmers, public transport, low-income families and taxi drivers to cushion the crunch of price rises.
For instance, farmers would get five yuan per mu (1/15 hectare)of farmland in extra subsidy; low-income families in cities would get an extra 15 yuan for each person every month starting from July, 10 yuan for such rural families.
The commission said fares for passenger travel by rail, urban and rural public transport and taxis would remain unchanged after the rise.
The official did not comment on the impact of oil price rises on the inflation rate, which eased to 7.7 percent in May. In April, it rose 8.5 percent after a 12-year high of 8.7 percent in February.
The commission also said the average electricity tariff will be raised by 2.5 cents per kwh starting from July 1, up 4.7 percent on average.
It said the price rise was made in response to rising costs of the country's power plants, including rising power-coal prices, increased costs on desulphuration facilities and investment in grid upgrading.
More than 80 percent of all the power generation companies suffered losses in the January-May period due to power-coal price rises.
Official statistics showed that power coal prices went up by more than 80 yuan per tonne in the past two years. The prices had gone up by 60 yuan since the beginning of the year.
The commission also announced the country would exercise temporary price intervention on power coal as of Dec. 31, and power coal prices are capped below the price on June 19.
The policy was adopted as the commission expected the power-coal price to rise further because of the gap between domestic and international prices and tight supplies.
The commission also said urban and rural residents and sectors of farming and fertilizer production, as well as the quake-hit provinces of Sichuan, Shaanxi and Gansu, will be exempt from the price rise.
Industrial and commercial undertakings, however, would only see limited impact, as power expenses usually account for a small portion of their total costs, it said.
"The price rise in electricity would not have a fundamental impact on the country's inflation rate," said the NDRC official.

Weakening dollar adds price pressure(2008/6/23)
          BEIJING, June 19 -- A weakening dollar has contributed to China's inflationary pressure by pushing up commodity prices around the world, said the country's central bank governor.
Chinese policymakers need to learn from the lessons of U.S. subprime woes, said Zhou Xiaochuan, governor of the People's Bank of China, also a member of the Chinese delegation attending the two-day session of the Sino-US Strategic Economic Dialogue (SED) in Maryland.
The dialogue, headed by the U.S. Treasury Secretary Henry Paulson and Chinese Vice-Premier Wang Qishan, ended yesterday.
"Emerging economies are feeling the pinch (of rising prices)," he said at a news briefing in Annapolis, Maryland. "A weakening dollar may push up prices of commodities such as crude oil," which are major imports of China, he said.
The price of crude oil has on one occasion topped 135 dollars a barrel in recent trading sessions.
Raw-material prices have also been hovering at high levels since last year, putting pressure on China's factory-gate prices, which would in turn pass onto the consumer inflation zone.
In May, China's producer price index, which gauges factory-gate prices, rose 8.2 percent, the highest in more than three years, feeding concerns that although consumer inflation eased to 7.7 percent in May, down from 8.5 percent the previous month, it may rebound in the coming months.
The central bank yesterday set the mid-point of the yuan's exchange rate at 6.8823 against the dollar, marking a new historical high since China revalued the yuan by 2.1 percent to 8.11 per dollar in July, 2005. It has appreciated a further 17.84 percent since then.
The yuan has regained momentum of fast appreciation while it is strengthening in the non-deliverable forwards market.
Analysts said the yuan's strengthening would reduce pressure on China's "imported inflation", or inflation incurred by imports, but the effect has proved to be limited. Worse, it has started to push some domestic export-oriented enterprises to the wall.
The appreciation momentum of the yuan may not slow until the Olympic Games in August, said Liu Dongliang, currency analyst of the Shenzhen-based China Merchants Bank. "The post-Olympic trend is not clear yet."
Zhou also said China will learn from the U.S. financial woes triggered by its subprime problems.
Sovereign wealth fund
Finance Minister Xie Xuren, who was also attending the SED session, said the country's overseas investment through its 200 billion dollar sovereign wealth fund does not pose a threat to financial markets.
Xie said that the fund is not aimed at short-term speculation but long-term investments that should help the overall economy.
As the U.S. financial market is bogged down by the subprime crisis, the capital injection from investment by the world's major sovereign wealth funds has helped stabilize the market, but some U.S. politicians fear that such investment will pose a threat to U.S. financial security.

World Bank raises China 2008 growth forecast to 9.8%(2008/6/20)
         (Xinhua) -- Reflecting strong service sector activity, the World Bank raised its forecast for China's 2008 economic growth to 9.8 percent, from 9.4 percent, in a report released on Thursday.
In April, the bank downgraded its forecast to 9.4 percent from the 9.6 percent prediction made in the beginning of 2008 and 10.8 percent made in mid-2007.
The upward revision this time largely reflected data showing stronger service sector growth in revised gross domestic product (GDP) data, said the World Bank Beijing Office in its Quarterly Update for China.
China's National Bureau of Statistics (NBS) has raised the country's 2007 GDP growth figure by 0.5 percentage point to 11.9 percent, the fastest since 1994. The NBS cited service industry growth in its revision.
The bank's report said that most developing and emerging markets, like China, would outperform high-income countries as they were less directly exposed to the financial turmoil and would see a modest, orderly slowdown.
China's economic growth had slowed to a more sustainable pace, which in part reflected less buoyant investment, but the country's domestic economy was holding up well, it said.
Exports, backed up by strong international competitiveness and a robust domestic economy, would support China's 2008 growth amid weak, uncertain global prospects, it claimed.
It noted that although damage from the earthquake that hit southwestern China in May to the affected area was huge, the macroeconomic impact was likely to be modest as the affected area accounted for only a small part of China's economy.
The report pointed out that headline inflation was receding while non-food price pressures emerged.
Some spill-over from higher food prices was flowing into wages and some other prices, while the impact of recent industrial commodity and oil price hikes was in the pipeline.
However, generalized spill-over to consumer prices had remained limited and headline consumer price inflation was expected to recede gradually, it said.
China's consumer price index (CPI), a major gauge for inflation, eased by 0.8 percentage point month-on-month to 7.7 percent in May. In April, it rose 8.5 percent after hitting a 12-year high of8.7 percent in February.
The producer price index, which measures the value of finished products leaving the factory, rose 8.2 percent year-on-year in May. The rise was 0.1 percentage point higher than in April.
The World Bank report suggested that there was no need to ease the overall macroeconomic stance, but it called for vigilance and flexibility, given global uncertainties.
"If there is a more serious slowdown than we currently envisage, fiscal easing could be considered," said Louis Kuijs, the report's main author.
Containing the spill-over of raw material price pressures and inflation expectations would require relatively tight monetary policy. China's current macroeconomic situation called for good coordination between fiscal and monetary policy, according to the report.
"Bringing prices of fuel closer to levels that reflect the scarcity of energy is important for rebalancing and to reduce distortions," Kuijs said.
China imposes price caps on gasoline and other refined oil products. Since the caps mean the country's major oil companies can't pass on costs to consumers, the government provides subsidies to cover most of their losses.

China's fixed asset investment up 25.6% in Jan-May(2008/6/18)
         China's urban fixed-asset investment rose 25.6 percent to 4.0264 trillion yuan (575.2 billion U.S. dollars) in the first five months of 2008 compared to the same period a year earlier, the National Bureau of Statistics (NBS) said here Tuesday.
The growth figure was 0.3 percentage points lower from the same period last year, and 0.1 percentage points lower than the Jan-April period this year.
"The growth was broadly in line with market expectations and reflected the government's efforts to prevent the economy from getting overheated," said Hu Yanni, a CITIC Securities Research analyst.
Hu said the deadly May 12 quake in Sichuan Province would have a short-term negative impact on fixed-asset investment, while speeding up the investment pace in the long run with the surge in demand on infrastructure rebuilding and temporary settlement construction in the affected regions.
Li Daokui, a Tsinghua University economist, said the investment was not apparently overheated, but the government should be cautious as it was likely to rebound in the second half to add to inflationary pressures.
The NBS reported earlier this month that inflation, as measured by the consumer price index (CPI), was up 7.7 percent in May over the same month last year. In April, it rose 8.5 percent after a 12-year high of 8.7 percent in February.
Meanwhile, there were worries the CPI would accelerate because of rising factory-gate prices, analysts said.
The producer price index (PPI), which measures the value of finished products when they leave the factory, rose 8.2 percent inMay over the same month last year. The rise was 0.1 percentage points higher than April's 8.1 percent.
Investment in state-owned and state-controlled enterprises was 1.6397 trillion yuan, up 18 percent. Investment in the real estate sector grew 31.9 percent to 951.9 billion yuan, the NBS said.
Primary industry (farming, fishing, forestry and the like) continued to grow the fastest among industrial sectors, expanding 66.1 percent during the first five months. That compared with secondary and tertiary industries, whose investment rose 25.6 percent and 25 percent, respectively.
Zhang Xiaojing, a Chinese Academy of Social Sciences analyst, said the 71-percent surge in primary industry investment was a positive sign. It showed the government's move to shore up agricultural development was effective.
Investment by the central government expanded 18.5 percent year-on-year to 369.9 billion yuan and that by local governments was up 26.4 percent to 3.6566 trillion yuan.
The first five months saw the commencement of 84,368 projects, 9,667 more than the same period last year. Planned investment in these new projects was 2.721 trillion yuan, down 2.5 percent.
Fixed-asset investment is a main gauge of spending on new productive capacity and has been rising rapidly, fuelled by the ample liquidity in the country.
The government has taken a series of measures to drain liquidity as it tries to maintain a more sustainable economic growth and curb inflation.
In its latest effort to rein in credit growth, the central bank announced it would raise the reserve-requirement ratio for commercial banks by 1.0 percentage point in two stages this month to a new high of 17.5 percent.

China's industrial output up 16.0% in May(2008/6/17)
        (Xinhua) -- The industrial output of China's major enterprises grew 16.0 percent year-on-year in May, the National Bureau of Statistics (NBS) said Monday.
The increase was 0.3 percentage points higher than April and 2.1 percentage points lower than May last year, the bureau said.
"The industrial output slowed down despite the fact that the week-long May Day holiday was shortened to three days this year, which gave the country a longer working month," said Zhang Yansheng, head of the Research Institute of Foreign Trade and Economic Cooperation under the National Development and Reform Commission.
Zhang contributed the slower growth to the government's efforts to prevent the economy from going overheated. The January-May industrial output increased 16.3 percent, 1.8 percentage points lower than the same period of last year.
The output of textile, chemicals, ferrous and non-ferrous metals, electrical equipments all saw slower growth while that of general equipments, transportation equipments and telecommunication equipments, computer and other electronic equipments witnessed higher growth in May.
Analysts said the growth in some sectors was likely driven by the surge in demand following the catastrophic earthquake in mid-May. After the quake which destroyed factories and houses, the country began constructing temporary settlement areas for the survivors and rebuilding infrastructure facilities in the affected regions.
The output of power and coal rose 11.8 percent and 18.5 percent respectively; crude steel was up 10.5 percent; Motor vehicles rose 21.7 percent, among which cars rose 17.6 percent.
Crude oil output reached 16.2 million tonnes, a modest rise of 1.8 percent from a year earlier.
The sales ratio of industrial products was 98.0 percent, an increase of 0.1 percentage points over last May. This figure measured the part of production that were sold rather than those went into inventory.

China's inflation eases but prices to remain high(2008/6/16)
       (Xinhua) -- China's inflation eased in May, a welcome trend that analysts said would continue for the rest of the year as food prices had started falling after surging over the past year.
The consumer price index (CPI), the main gauge of inflation, rose 7.7 percent last month, marking its first significant drop since last year, the National Bureau of Statistics (NBS) said on Thursday.
The CPI rose 8.5 percent in April, up from 8.3 in March and down from the 12-year high of 8.7 percent in February.
However, while inflation was decelerating, prices would remain high this year, and the situation might trigger further tightening and price reforms involving energy and resources, said analysts.
CPI TO DROP FURTHER
The CPI would continue to fall for the rest of the year with declining food prices, according to the China International Capital Corp. (CICC).
The rate of increase in food prices, a major driver behind China's high inflation, dropped 2.2 percentage points to 19.9 percent in May.
As stocks of live pigs and the yield of rape vegetables increased, the trend would likely to continue because of increasing supplies and an expected bumper harvest.
China has since last year introduced a series of incentives, including direct subsidies and government-funded insurance, to boost agricultural production.
Li Huiyong, an analyst with Shenyin Wanguo Securities, said that the devastating earthquake in Sichuan Province on May 12 had a limited impact on food prices as the grain and pork output in the quake regions accounted for a tiny portion of the nation's total.
Liang Hong, chief China economist with Goldman Sachs, said the easing in May might mark a start of prices softening during the remaining period of the year if the government stuck to tight monetary policies.
The People's Bank of China (PBOC), the central bank, ordered a full percentage point rise in the reserve requirement ratio on Saturday to enhance liquidity management and tame inflation. The larger-than-expected hike followed 14 increases in the reserve ratio and six interest rate hikes since last year.
This move dashed market hopes the PBOC would relax monetary policy as the economy faced a worrisome slowdown on weaker export growth and the impact of several crises, from the worst blizzards in five decades earlier this year to last month's 8.0-magnitude quake.
PRICES TO REMAIN HIGH
Inflation also eased because of the high base of comparison from late last year, but absolute prices would continue to climb all through the year, said Hu Yuexiao, an analyst with Shanghai Securities.
"The inflation situation is still very grim and the CPI is set to exceed the government target of 4.8 percent for 2008," said Hu.
The Bank of China (BOC) forecast the CPI will rise 8.3 percent in the second quarter and 6.8 percent the whole year.
The quake would not change economic fundamentals, but the massive investment required for reconstruction might add new inflationary pressures, the leading commercial bank said.
The acceleration in the producer price index (PPI) in May might lead to a rebound in the CPI sometime later this year as producers pass the higher costs on to consumers, analysts said.
The PPI surged 8.2 percent in May on higher costs of energy, resources and labor, after gaining 8.1 percent in April, the NBS said on Wednesday.
This also deepened worries that higher factory-gate prices might lead to more worrisome broad-based price rises, in contrast to the current structural hikes mainly caused by food.
"The pressures for broad-based price rises are still the biggest risk for the macro-economy," the central bank said in a report published early the month.
MORE TIGHTENING, PRICE CURBS?
Chinese authorities still needed to stick to a tight monetary policy and raise interest rates "at a proper time," following the reserve hike on Saturday, to more effectively curb inflation, the BOC said in a research report released on Tuesday.
Rate hikes would help to end negative interest rates to become one of the most effective weapons against inflation, the report noted.
The central bank, however, has refrained from boosting interest rates this year, fearing that could attract more overseas speculative funds after the sharp rate cuts in the United States.
With difficulty in reaching a consensus on rate hikes, the PBOC would use more bill sales, reserve ratio increases and administrative intervention to curb excess liquidity and inflation, the report added.
The trade surplus, although shrinking in recent months, continued to pump a huge amount of liquidity into the banking system, partly blamed for price surges.
To curb inflation and support post-quake building, the National Development and Reform Commission (NDRC), the top economic planning agency, ordered on Wednesday temporary price controls on construction materials such as steel, cement, timber and glass.
Earlier the year, the NDRC ordered similar steps for basic necessities ranging from grain, edible oils, meat, milk and eggs to liquefied petroleum gas.
The decelerating inflation might offer an opportunity for lifting some price controls, including raising fuel prices, in the second half of the year, CICC added.
Price controls have managed to limit the inflationary surge, but they were also widely said to have cut corporate profit growth or even caused losses and made businesses unwilling to increase output, which in turn fanned inflation.

China's monthly CPI rises 7.7% in May(2008/6/13)
       China's consumer price index (CPI), the main gauge of inflation, in May was 7.7 percent up from the same period last year, the National Bureau of Statistics (NBS) said on Thursday.
The figure, compared with 8.5 percent in April and a 12-year high of 8.7 percent in February, was broadly in line with most forecasts, but still in excess of the government's annual target of 4.8 percent.
The May CPI rose 7.3 percent in urban areas, and 8.5 percent in rural areas, according to statistics.
Meat prices increased 37.8 percent, with pork surging 48 percent alone. Cooking oil went up 41.4 percent, with vegetables increasing 10.3 percent, aquatic products rising 18.3 percent and grains up 8.6 percent.
"The CPI growth rate has been declining, and the trend is expected to continue in the next few months," said Zhang Liqun, a macro-economist with the Development Research Center of the State Council, China's Cabinet.
"China still faced inflationary pressure, but this will improve, as food prices -- the main driving factor of high inflation -- started to decline."
Food prices, which accounted for more than a third of the CPI calculation, soared 19.9 percent in May, 2.2 percentage points lower than the growth in April.
Transport and telecom prices fell 1.6 percent compared to last May. Clothing, amusement, education and other services prices also declined in May.
Non-food prices in May were up 1.7 percent over a year earlier, compared with April's growth rate of 1.8 percent.
Yin Jianfeng, an economist with the Institute of Finance and Banking at the Chinese Academy of Social Sciences, said soaring grain and oil prices on the international market greatly contributed to the country's inflation.
"Food prices on the world market were the highest in 30 years. Surging crude oil prices and a weakening U.S. economy also brought pressure to China's domestic market."
"But the high prices are not expected to last long. They may face a turning point and start to decline gradually. China's economy will in turn improve, and the inflation may certainly ease."
Yin added the government shouldn't resort to further increases in interest rates and bank reserve