The quarterly report released by China’s National Bureau of Statistics (NBS) on July 17 suggests that measures to tame sizzling economic growth may be taking effect.
China’s GDP grew by 10.4% year-on-year in the first half, down from 12.2% in the same period last year and 11.9% for 2007 as a whole.
The NBS now expects full-year GDP growth to come in at 10%.
The specter of inflation still loomed large. China’s consumer price index (CPI) in the first half rose by 7.9% on the back of a 20.4% surge in food prices. However, prices appeared to moderate in June, rising 7.1% compared to 7.7% in May and 8.5% in April.
While the headline CPI is easing up – largely due to falling food prices – this does not mean China has won its battle with inflation. The producer price index rose 8.8% in June, up from 8.2% in May, confirming reports that firms are struggling with the burden of rising input costs.
There were some positives to be drawn from retail sales figures for the first half, which rose 21.4% year-on-year, six percentage points higher than the same in 2007.
Meanwhile, fixed-asset investment in the first six months grew by 26.3%, a 0.4 percentage-point increase on last year.
China’s first-half trade surplus dropped by US$13.2 billion to US$99 billion. Exports rose 21.9% to US$666.6 billion, though this represented a decrease of 5.7 percentage points from the same period last year. Imports grew by 30.6% to US$567.6 billion, representing a 12.4 percentage point rise in import growth year-on-year.