Macro control slows down growth

By Zhao Huanxin (China Daily)
Updated: 2006-10-20 07:15

As temperatures cooled in autumn, so did the nation's sizzling economic growth, which slowed to 10.4 per cent in the third quarter down 0.9 percentage points from the April-June period.

The slowdown is expected to continue till the end of the year, which indicates that the government's macro control policies are taking effect, the National Bureau of Statistics (NBS) said yesterday.

Speaking at a news conference held by the State Council Information Office, NBS spokesman Li Xiaochao said the country posted gross domestic product (GDP) growth of 10.7 per cent year-on-year in the first three quarters, while ringing up a trade surplus of US$109.85 billion.

The Chinese Academy of Social Sciences, a top government think tank, predicted earlier this month that the country could register growth of 10.5 per cent for the whole year.

Macro controls, including monetary and financial policies and legal and administrative measures, have "effectively" prevented the economy from overheating or fluctuating too dramatically, Li said.

An investment surge, particularly in some sectors, which has been a cause of concern for economic planners, seemed to be easing off.

Urban fixed asset investment, including real estate, increased by 24.2 per cent in the third quarter, compared with the historic high of 31.9 per cent in the second quarter, thanks to tighter land controls and lending; and a higher threshold for market access, Li said.

The spokesman said the achievements should be consolidated, adding the country needed to wait and see before deciding on the next steps with regard to the macro-regulatory policies as there are still some uncertainties in both the domestic and external economies.

On Wednesday, the State Council urged local authorities to tighten controls over land supply, bank lending and market access and fully implement the macro-control policies to cool down the property market.

In the fourth quarter, the government will strengthen support for farmers and stabilize prices for grain and agricultural production materials, according to a document released after a State Council meeting presided over by Premier Wen Jiabao.

Li also said China's foreign trade enjoyed rapid growth with a further increase in surplus.

Volume surged to US$1.27 trillion, up 24.3 per cent from a year earlier; and exports were US$109.85 billion more than imports at the end of September, or US$8 billion more than the whole of last year.

The spokesman attributed the rise in surplus partly to China's low labour costs. Other factors included China's status as a major destination for foreign investment, and the free movement of goods and services resulting from globalization.