Chinese economy grows 8.1% in Q1

["Ulhas Joglekar" <ulhasj@xxxxxxxxxxxxxxxxxxxx>]

Monday 17 April 2000

Chinese economy grows 8.1% in Q1
BEIJING: China said on Sunday that its economy got off to a
better-than-expected start in the first quarter of this year, with gross
domestic product (GDP) growing 8.1 per cent year-on year.
``This year so far the Chinese economy has maintained good momentum. GDP
grew by 8.1 per cent,'' Li Rongrong, Vice-Chairman of the state economic and
trade commission, told a meeting of the World Economic Forum in Beijing.
Li gave no explanation for the bullish figure which exceeded an average
forecast of 7.9 per cent from a Reuters poll of analysts at 10 research
houses last week.
But the analysts said January-March GDP was buoyed by strong exports and a
slight pickup in domestic consumption.
GDP growth in the first quarter was well above China's annual 7.1 per cent
growth of 1999, but still below the 8.3 per cent posted in that first
quarter.
This year's Q1 figure, backed up by strong industrial, trade and foreign
investment indicators, appeared to point to a sharp turnaround.
Contracted foreign direct investment (FDI) surged 27.03 per cent year on
year in the first quarter while industrial output, boosted by exports, grew
a solid 10.7 per cent.
First quarter exports surged 39.1 per cent year-on-year.
However, some analysts have said the rosy statistics belied unfinished
structural and financial reforms, persistent deflationary pressure and an
unhealthy dependence on state spending.
Others pointed out that the figures were coming off a relatively low base in
the first quarter of last year.
And economists have warned that heavy state stimulus spending, in which the
government has poured billions of dollars into infrastructure, had given
state-owned enterprises (SOEs) an artificial lifeline and blunted incentives
to reform.
The weaknesses of the state sector have surfaced in this year's earning
season, in which 80 of the roughly 950 companies listed on the Shanghai and
Shenzhen stock exchanges had forecast net losses for 1999. (Reuters)
 For reprint rights: Times Syndication Service
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