Economic growth accelerates

China's economy grew by 9.9 per cent during the first quarter of this year compared with the same period last year, National Bureau of Statistics Chief Economist Yao Jingyuan said Thursday.

Preliminary figures suggest that the country's gross domestic product (GDP) reached 2.356 trillion yuan (US$283.9 billion) during the January-March period, a year-on-year increase of 9.9 per cent, Yao told a Beijing press conference.

It was the fastest first quarter growth since 1997 and 2.3 percentage points higher than first quarter growth in 2002, he said.

The good performance in the first quarter of 2003 was a continuation of the sustained, rapid and healthy economic development witnessed by China last year, Yao said.

"The economy has been growing in new areas, while microeconomic activity also remains vigorous,'' he said.

Cars and houses are becoming "hot consumption items,'' he said.

During the January-March period, sales of commodity housing rose year-on-year by 52.7 per cent, while sales of automobiles rose a year-on-year 99 per cent.

"The strong economic growth was a result of the central government's efforts to boost domestic demand,'' Yao said.

The government has carried out a pro-active fiscal policy and a sound monetary policy over the past five years, he said.

The government issued a total of 660 billion yuan (US$79.5 billion) of long-term treasury bonds during those five years, helping the construction of a number of infrastructure projects, including transportation facilities and power projects.

As a result, the economic development "bottleneck'' has been eased, he said.

The good economic performance was also a result of the positive impact of the country's accession to the World Trade Organization, he said.

During the first quarter, foreign trade grew year-on-year by 42.4 per cent to US$173.7 billion.

Foreign investors pledged to pour US$23 billion into China during the period, an increase of 59.6 per cent.

China's economy has entered a new period of accelerated development, Yao said, noting that industrial growth had increased by 17.2 per cent to 834.3 billion yuan (US$100.5 billion), 6.3 percentage points faster than the same period last year.

Fixed asset investment stood at 615.5 billion yuan (US$74.2 billion), up 27.8 per cent from the same period last year and 8.2 percentage points faster than the first quarter in 2002.

Retail sales rose year-on-year by 9.2 per cent to 1.11 trillion yuan (US$133.8 billion).

The consumer price index rose 0.5 per cent in the first three months, the first positive growth since November 2001.

However, Yao said some problems still existed in China's economic development.

The development of some industries was too fast, while in other industries the relationship between supply and demand was too tight, he said.

Also, rural consumption level is still too low, he said.

The spread of severe acute respiratory syndrome will also have some impact on overall economic development, he added.