A Look at China’s Half Year Report

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By Jie Gong

SHANGHAI, Jul. 23 – China’s National Bureau of Statistics has just released its latest economic figures this month and it paints a picture of  how the country has fared thus far with half the year already over.

China Briefing has compiled the official economic figures announced by various government agencies in a chart that can be downloaded here. A summary of the figures is as follows:

GDP
The country’s GDP grew by 7.1 percent in the first half of 2009, compared to 10.4 percent in the same period last year. This year, GDP grew by 6.1 percent in the first quarter and 7.9 percent in the second quarter. Last year was China’s lowest China’s GDP growth rate in seven years at 9 percent.

Bank lending
Commercial bank lending in China has been steadily increasing from RMB20.45 trillion in January to RMB24.46 trillion in June. The total lending reached RMB135.25 trillion for the first half of 2009. According to the Central Bank, this poses a risk for potential inflation.

Retail sales
China’s retail sales in the first half of the year increased slightly to RMB5.87 trillion compared to last year, a sign regarded by some to mean that the government’s stimulus plan was working. January’s particularly high rate was a result of the Chinese Spring Festival, the country’s major shopping period.

Exports and Imports
China’s exports and imports amounted to US$522 billion and US$425 billion respectively in the first half of 2009. Both saw a year-on-year decline of more than 20 percent while trade balance also decreased to US$97 billion.

Foreign Direct Investment (Realized)
Foreign direct investment in the first half of 2009 amounted to US$43 billion. The year-on-year decrease was 28.4 percent compared to a 45.6 percent increase last year. However, March’s FDI increase ended China’s consecutive five-month FDI decline since October.

New FIEs
Newly established foreign-invested enterprises (FIEs) decreased by 28.3 percent year-on-year to 10,419 for the first half of 2009. It roughly followed the same monthly growth pattern as that of FDI.

Consumer Price Index (CPI)
China’s consumer price index, a main gauge of inflation, has been experiencing a negative growth since February 2009, which was also the first monthly negative growth since December 2002. The fallen domestic and foreign demand caused by the global economic downturn contributed to the domestic price fall and raised risk of deflation.

Exchange Rate
The exchange rate of the U.S. dollar against the Chinese renminbi was US$1 is to RMB6.83 for the first half of 2009 and is predicted to remain stable until the third quarter in 2009.

Tax Revenue
Tax revenue for the first half of 2009 reached RMB687 billion. Stamp tax revenue plunged by 74.5 percent and majority of the tax revenue collected in recent months came from business tax.

Number of Automobiles Sold
The number of automobiles sold in China in the first half of 2009 reached 6.1 million, with 4.5 million of those sold being passenger vehicles. The surge of automobile sales since March was largely attributed to passenger vehicle sales boosted by the government stimulus policy.

Value of Industrial Exports
The value of China’s industrial exports for up-scale enterprises or enterprises with annual revenues exceeding RMB5 million, increased from RMB440 billion in January to RMB648 billion in June 2009. The total number reached RMB323,6 billion in the first half of 2009.

Industrial output, which usually accounts for half of China’s GDP, increased year-on-year by 7 percent, but was still 9.3 percent lower than the same period last year.

Despite the global crisis, it is possible that China might achieve its goal of 8 percent GDP growth this year. The decline of exports and imports slowed in June and retail sales in the first half of the year performed better than that of last year, signaling that the stimulus plan has boosted domestic consumption. However, the sharp decline of FDI this year suggests that China would still be affected by the global economic downturn for a while.