BEIJING - As China
struggles to rein in its charging economy and
rationalize its growth, there are signs that while some
sectors continue to gallop along, some are moving
briskly, but at a canter. This spring, alarmed by
reckless growth at 9.7%, the government ordered
macro-control measures and reduced investment in steel,
cement, real estate and other overheated sectors.
For a recklessly romping economy, what once
might have been considered "bad news" - slowdowns and
declines in output, imports and consumption - is now
seen in a more favorable light as indications that
control measures are beginning to work, albeit slowly
and with political resistance. There is still some
unbridled opposition to these economic reforms from
political and business interests who see their economic
power waning.
Here are some small but
significant indicators reported on Thursday: the bad
news that could be good.
Rolled steel imports
down China's import of rolled steel was 18.0406
million tons in the first half of 2004, 457,400 tons
less than in the same period of 2003, down 2.74%. This
was the first import decline since 1998, according to
the China Iron and Steel Industry Association.
The import slide accelerated in the second
quarter. In May and June, China imported 4.5687 million
tons of rolled steel, a decrease of 1.9606 million tons
or 30.03% from the figure in the year-earlier period.
State bank loan growth slows New loans
granted by China Construction Bank, one of China's four
state-owned banks, amounted to 141.7 billion yuan
(US$17.1 billion) in the first six months of this year,
up 6.78% over the figure for the year-earlier period.
But the growth rate was 10.02 percentage points lower
than that in the same period of last year, which hit
16.8%.
According to a bank official, new loans
for capital construction, technical upgrading,
individual housing, personal consumption and discount
accounted for 122.7 billion yuan, up 44.7% year-on-year.
The loans for real-estate development were reduced by
7.8 billion yuan from the beginning of the year.
Meanwhile, the growth of the bank's loans for
China's key economic development areas, including the
Yangtze River Delta, the Pearl River Delta and the Bohai
Rim area, accelerated, 0.75 percentage point higher than
the average growth rate of the bank's total loans.
Consumer market slows in second
half China's total retail sales of consumer
products in the second half of this year is predicted to
grow at a slightly slower pace, as compared with the
12.8% growth in the first half of the year, according to
a forecast by the Ministry of Commerce. This is because
the first half-year's growth, 4.8 percentage points
higher than the year-earlier period, is based on a low
base in the corresponding period of last year, the
ministry said.
China's total retail sales of
consumer products in 2004 is estimated to exceed 5
trillion yuan (US$604 billion), up 10.5% at least over
last year, basically equaling last year's growth; and
the sales of capital goods will break 10 trillion yuan,
up 15%.
A report by the ministry shows that
demand for capital goods eased in the first half of this
year, and the upward trend of prices slowed down,
indicating that pressure on inflation will be eased
gradually.
Chain-store business captured a
significantly larger share of the market. The sales of
China's top 100 chain-store enterprises contributed more
than 10% of national total retail sales of consumer
products in the first half of this year, as compared
with 7.8% in the year-earlier period.
Consumer confidence flagging
Currently, consumer confidence is weakening,
with the final consumption rate remaining low. The
growth of total retail sales of consumer products in the
first half of this year was 22.3 percentage points lower
than investment, pushing the final consumption rate down
to 55.4%, the lowest since 1978, the report says.
In addition, stocks of commodities and the
amount of funds occupied by inventories increased
remarkably. The industrial products kept in stock by 39
industries monitored amounted to 908.43 billion yuan
from January to April, an increase of 18.9% over the
year-earlier period. The inventory of wholesale and
retailing enterprises also increased by 10.3% in the
first half.
