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Fri, Mar 01, 2002 - Page 21 News List

China's GDP growth still slowing

BLOOMBERG , BEIJING

A Chinese couple rest on a bus-stop bench surrounded with advertisements in Beijing yesterday. China's advertising market continued to boom last year, growing 15.8 percent compared to 7.3 percent growth in the economy as a whole.

PHOTO: AFP

China's fourth-quarter economic growth was the slowest in two years, and the government said it expects a "grim" global economic environment to weigh on Asia's second-largest economy this year.

The economy grew 6.6 percent from a year earlier in the last three months of last year, slowing from the third quarter's 7 percent pace, said Zhu Zhixin, head of the National Bureau of Statistics.

China is aiming for 7 percent growth this year, even as overseas demand slows and WTO membership exposes companies to tougher foreign competition.

"We may face a more grim world economic environment" this year, Zhu said at a press conference on 2001 economic performance.

"China needs to find a way to overcome the challenges that WTO membership has brought."

China's economy expanded 7.3 percent last year, slowing from an 8 percent pace in 2000, Zhu said, confirming an estimate released earlier. Export growth for the year slowed by about three-quarters to 6.8 percent.

To create jobs and spur domestic spending, China plans to spend about 150 billion yuan (US$18.1 billion) on public-works projects such as roads, dams and bridges this year.

The government has said WTO entry may put millions of people out of work as the country scraps protective farm tariffs and state-run companies shed workers to become more competitive.

China's auto industry is especially vulnerable to an influx of foreign competition because of its low productivity and "backward technology," the State Economic and Trade Commission said in a separate report today.

Retail sales rose 10.1 percent last year from 2000, accelerating from a 9.7 percent pace in 2000, Zhu said. While that suggests the state spending drive is working, other signs -- such as falling consumer prices and rising household savings -- point to flagging consumer demand.

In January, retail sales rose 7.9 percent from a year earlier, slowing from last year's pace, Zhu said.

A total of 730.3 million people in China were employed at the end of last year, up 9.4 million from a year earlier, Zhu said.

Still, he said urban jobless rate climbed to 3.6 percent at the end of the year from 3.1 percent a year earlier.

Zhu acknowledged that official statistics may paint an overly optimistic picture of China's economy. A government probe last year found 60,000 cases of inaccurate reporting, including "intentionally false" figures, he said. He said the findings may prompt China to revise growth figures for past years.

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