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Statistician: China economy could continue to slow

(Xinhua)
Updated: 2008-07-01 20:12

China's economy might continue to decelerate as a result of slower industrial output growth and weakening overseas demand, according to a posting on the National Bureau of Statistics (NBS) website.

Deputy head of the NBS, Xie Hongguang, said uncertainties for China's economic growth still existed: "We should raise our awareness and pay more attention to economic problems," he wrote.

He wrote that domestic inflation remained a large problem. "China raised prices for refined oil products and electricity. Meanwhile, prices for large scale commodities were still increasing, which all contributed to high inflation.

"Local governments are active in stimulating the local economy, thus more loans and investments may be granted. However, growth for industrial output and overseas demand slowed down," he wrote.

In addition, world financial markets were volatile. "Although the US, Japanese and European Union economies performed better than expected, prices for primary products, such as oil and grain, were still rising. Financial markets were adjusting," he wrote.

China has seen some major measures of its economy slow down for the first time in five years.

Gross domestic product stood at 6.15 trillion yuan ($900 billion) in the first quarter, up 10.6 percent year-on-year. However, the growth rate was 1.1 percentage lower than a year earlier.

Exports in the first five months rose 22.9 percent to $545.1 billion, but the growth rate was 4.9 percentage points lower than a year earlier. Exports of energy-intensive products, such as steel and steel slabs, dropped 20.8 percent and 96.9 percent, respectively.

Urban fixed-asset investment also fell 0.3 percentage points to stand at 4 trillion yuan from January-May.