Liu Shijin, Yu Bin & Zhang Liqun

In the first half of the year, economic growth accelerated, economic efficiency improved, and the economic performance developed with an obvious upward trend. In the second half of the year, the growth of exports tends to decline, the foundation for a continuous expansion of the domestic demand is not stable yet, the growth rate is likely to drop slightly. It is estimated that the annual economic growth can reach 7.5%. The priority of the current macro economic policy should be changed from promoting short-term economic growth to solving the major problems facing the medium and long-term development so as to maintain sustained and stable growth of the national economy.

I. Major features of the economic performance in the first half of the year

From the beginning of this year, economic growth developed with the trend of quarterly acceleration and the economic performance had the following features:

1. Demands increased in an all-round way, and the pattern of economic growth underwent changes. Exports, consumption and demand for investment all maintained a high growth rate, and the overall increase in demand constituted the important foundation for the economic recovery and growth. The fast growth of exports and consumption demands, in particular, played an increasingly role in driving the economic growth. In the first six months, foreign trade maintained an extraordinarily high growth, increased by 38.3% as compared with that of the same period of last year. The total retail volume of consumption goods increased by 10.1% as compared with that of the same period of last year, the growth rate was 3.7 percentage points higher than that of the same period of last year; while the overall fixed assets investment increased by 11%. The adjustment and effective application of the macro economic policies in recent years, such as the increase of export rebate rate, the levy of interest tax, the implementation of real names for savings deposits, the prolonged holidays, the increase of incomes for middle and low-income groups, the interest discount by the state finance to support technological transformation of enterprises and the reform of housing distribution system, all played an important role in promoting the growth of exports, consumption and investment demands.

2. The overall price level continued to stay at a low level. Against the background of overall increase of demands and acceleration of the economic growth, the deflation situation began to ease. However, obviously different from the pattern of the economic performance in the past, the market demand-supply pattern did not undergo a fundamental change, and the overall price level still stays at a low level. In the first half of the year, the retail price index of consumption goods dropped by 1.9% as compared with that of the same period of last year; the resident consumption price index, due to influence by the increase of various service charge standards, reversed its negative trend and increased by 0.1% as compared with that of the same period of last year. The price of some production resources began to rise, such as steel, cotton, crude oil and finished oil, which was associated with the price fluctuation at the international market, the domestic restrictions on "five kinds of small enterprises" and the reduction of the production capacity. The continuous low level of the overall price indicates that surplus production capacity is still rather common and strikingly high, and the task for structural adjustment is still arduous.

3. The structure was improved slightly and the economic efficiency was improved. High-tech products maintained a fast development, the electronic, information and telecommunications industry contributed about 1.7 percentage points to the industrial growth, becoming a new force in the growth of industrial production. The growth of infrastructure industry accelerated, electricity generation increased by nearly 10% as compared with that of the same period of last year, the overall freight and passenger transportation increased by 4.2% and 7.3% respectively as compared with that of the same period of last year. The reduction of production capacity in coal, metallurgical and sugar-making industries produced some results – the production of crude coal dropped by 2.7%, the production of sugar dropped by 23.8%, and the growth rate of steel production dropped by about 5 percentage points as compared with the average growth rate of last year.

The quality and efficiency of economic performance were also improved. The stockpile of finished products of enterprises dropped, the sale rate of industrial products reached as high as 96.8%, marking an increase of 1.15 percentage points as compared with that of the same period of last year, the sale rate in June reached a record high of 97.8%. The economic efficiency of enterprises was improved. From January to May, the composite index of economic efficiency of industrial enterprises was 107.3, an increase of 16.4 percentage points as compared with that of the same period of last year, the amount of profit realized by enterprises increased by 1.3 times. The pace in reducing losses and increasing profits by the coal and metallurgical industries accelerated. In the first five months, the net losses suffered by the coal industry was reduced by 440 million yuan as compared with that of the same period of last year, the profits realized by the metallurgical industry increased by 5.8 times as compared with that of the same period of last year.

4. The fiscal and tax revenues and economic growth started to increase with the same pace. In recent years, the growth of fiscal and tax revenues continued to be faster than economic growth, producing a relatively complicated effect on expanding domestic demands. This year, the fiscal and tax revenues maintained a fairly fast growth, however, after the non-comparable factors were deducted, the fiscal and tax revenues and economic growth started to increase with the same pace. In the first half of the year, the national fiscal revenues totaled 624 billion yuan, an increase of 17.9% as compared with that of the same period of last year. The total amount of tax revenues was 597.3 billion yuan, an increase of 99.8 billion yuan or 20% growth, making this year’s increment biggest and the incremental rate fastest in recent years. The main sources for the growth of fiscal and tax revenues were the acceleration of economic growth, the improvement of enterprise economic efficiency, the bullish securities market as well as the increase of tariff due to the crackdown on smuggling and the fast growth of imports. In the first half of the year, import tariff collected by the customs and stamp tax collected from securities transactions increased by 32 billion yuan, accounting for 32% of the total incremental amount of fiscal and tax revenues; the enterprise income tax, income tax of enterprises with overseas investment and individual income tax increased by 22.7%, 35% and 50% respectively, amounted to 25.8 billion yuan, accounting for 26% of the total.

…

If you need the full text, please leave a message on the website.