China's grain reserves will run out in two years' time unless production improves, reported China Daily. The warning by officials and agricultural experts came as the National Bureau of Statistics announced that the country's grain harvest was set to drop 2.4 per cent from the 2002 yield of 457m tonnes. This would be the fifth consecutive fall in production from the peak harvest of 512m tonnes recorded in 1998.
Since the turn of the century, China has had an annual grain shortfall of 25m-35m tonnes. The deficit has been blamed on cropplanting acreages falling from 113.8m hectares in 1998 to 103.9m hectares in 2002.
Growth understated in post Sars surge China's economy grew 9.1 per cent in the third quarter of the year compared with a rise of just 6.7 per cent in the Sars-affected Aprilto- June period. GDP growth for the first nine months reached 8.5 per cent. A growing consensus of economists, however, believe that official statistics could be understating growth by several percentage points, reported the Financial Times. Jonathan Anderson, of UBS in Hong Kong, said that the bank's internal monitoring systems showed third quarter growth running at 14.2 per cent. Growth would be close to 11 per cent for the full year once other factors such as the slower moving rural economy were included.
Andy Xie, of Morgan Stanley in Hong Kong, highlighted a 30 per cent growth in exports, property and cars – sectors that together accounted for about 30 per cent of GDP. "One third of the economy growing by about 30 per cent – that's about 10 per cent already," he said. Power consumption, another independent tracker of economic activity, was up 15 per cent on 2002 levels. China's expansion has been driven primarily by fixed-asset investments, which rose 30.5 per cent to Yn3,400bn in the first nine months – a level of activity not seen since the overheating of the economy in 1994.