China's economy grew by 7.8 percent in the second quarter, making it an island of economic strength in a region again facing recession after recovering only briefly from a devastating econom.0ic crisis four years ago.
Much of East Asia, including Japan, is either contracting economically or is expected to soon, thanks largely to a slump in Western demand for the region's information technology products. But China remains resilient, in part because of something none of its neighbors have: a vast domestic market with a growing appetite for homemade cars, clothes and restaurant cooking.
"China keeps defying the gravity of a global slowdown because of its robust domestic demand," said Dong Tao, an economist at Credit Suisse First Boston in Hong Kong.
The country's economy grew 7.9 percent in the first half of the year compared with the same period a year ago, keeping its place as the world's fastest growing major economy and putting it on track for the target of 7 percent growth in the country's 2001 through 2005 five-year plan, according to Ye Zhen, spokesman for the State Statistics Bureau.
That's not to say that China is entirely sound: The country is in the midst of a difficult and drawn-out transition from a state-dominated, centrally planned economy to one that relies more on market dynamics. Growth is unevenly distributed across the land. And most of the country's economic activity is concentrated in a dozen of its largest cities while huge areas of the countryside -- where 900 million people live -- are in economic distress if not real recession.
China's statistics are themselves suspect: Many economists believe the country's real economic growth rate is, at most, half of that reported, making comparisons to the rest of the region less dramatic. What's important, they say, is the trend, and that trend continues to weaken.
The 7.8 percent year-over-year growth in the second quarter was down from 8.1 percent in the first quarter. And the country's export growth slowed to 8.8 percent in the first half of the year from 38 percent last year.
But the government is continuing its campaign, begun after Asia's economic crisis, to shift growth from an earlier dependence on exports and foreign investment to domestic spending.
The government itself has spent mightily on public works projects over the last five years, and continues to pour money into national highways, long-distance railways, oil and gas pipelines and water diversion projects.
It's running a deepening budget deficit to pay for it all and selling massive amounts of treasury bonds to its state-owned banks to indirectly tap some of the country's US$850 billion in personal savings accounts. The government plans to issue another 150 billion yuan (US$18.1 billion) in bonds this year for public works.
The government spending is intended to spur growth and even it out somewhat by spreading more of it inland.
Spending in preparation for the 2008 Summer Olympic Games, which will be held in Beijing, will add 0.3 to 0.4 percentage points to the country's annual growth rate, the State Statistics Bureau spokesman said.
The government is not the only one who is spending. Investment by both foreign and domestic firms, accounting for two-thirds of investment growth this year, has picked up in anticipation of China's entry to the WTO later this year. Contracted foreign direct investment, a gauge of future projects, rose 38 percent in the first half of the year to US$33.4 billion.
The country has been trying various ways to get its citizens to spend, too. It has levied taxes on bank deposits and cut deposit interest rates. It has raised government workers' salaries. And it has extended three national holidays to a full week each, hoping that people will shop and eat out during that time.
ROLLER-COASTER RIDE: More than five earthquakes ranging from magnitude 4.4 to 5.5 on the Richter scale shook eastern Taiwan in rapid succession yesterday afternoon Back-to-back weather fronts are forecast to hit Taiwan this week, resulting in rain across the nation in the coming days, the Central Weather Administration said yesterday, as it also warned residents in mountainous regions to be wary of landslides and rockfalls. As the first front approached, sporadic rainfall began in central and northern parts of Taiwan yesterday, the agency said, adding that rain is forecast to intensify in those regions today, while brief showers would also affect other parts of the nation. A second weather system is forecast to arrive on Thursday, bringing additional rain to the whole nation until Sunday, it
CONDITIONAL: The PRC imposes secret requirements that the funding it provides cannot be spent in states with diplomatic relations with Taiwan, Emma Reilly said China has been bribing UN officials to obtain “special benefits” and to block funding from countries that have diplomatic ties with Taiwan, a former UN employee told the British House of Commons on Tuesday. At a House of Commons Foreign Affairs Committee hearing into “international relations within the multilateral system,” former Office of the UN High Commissioner for Human Rights (OHCHR) employee Emma Reilly said in a written statement that “Beijing paid bribes to the two successive Presidents of the [UN] General Assembly” during the two-year negotiation of the Sustainable Development Goals. Another way China exercises influence within the UN Secretariat is
LANDSLIDES POSSIBLE: The agency advised the public to avoid visiting mountainous regions due to more expected aftershocks and rainfall from a series of weather fronts A series of earthquakes over the past few days were likely aftershocks of the April 3 earthquake in Hualien County, with further aftershocks to be expected for up to a year, the Central Weather Administration (CWA) said yesterday. Based on the nation’s experience after the quake on Sept. 21, 1999, more aftershocks are possible over the next six months to a year, the agency said. A total of 103 earthquakes of magnitude 4 on the local magnitude scale or higher hit Hualien County from 5:08pm on Monday to 10:27am yesterday, with 27 of them exceeding magnitude 5. They included two, of magnitude
Taiwan’s first drag queen to compete on the internationally acclaimed RuPaul’s Drag Race, Nymphia Wind (妮妃雅), was on Friday crowned the “Next Drag Superstar.” Dressed in a sparkling banana dress, Nymphia Wind swept onto the stage for the final, and stole the show. “Taiwan this is for you,” she said right after show host RuPaul announced her as the winner. “To those who feel like they don’t belong, just remember to live fearlessly and to live their truth,” she said on stage. One of the frontrunners for the past 15 episodes, the 28-year-old breezed through to the final after weeks of showcasing her unique