July data signal more positive changes in China's economy

(Xinhua)
Updated: 2009-08-11 23:03

BEIJING: China's key economic data in July adds to the optimism that the world's third largest economy is back on the track to recovery amid the global downturn, though challenges still persist.

MORE POSITIVE CHANGES

Both investment and consumption, two major engines that drive up China's growth, increased, according to statistics released by the National Bureau of Statistics (NBS) on Tuesday.

Urban fixed-asset investment rose 32.9 percent year on year in the first seven months. Retail sales, the main measure of consumer spending, rose 15.2 percent in July, following a 15 percent growth in June.

Further signs of rebound in private spending supported a sustained growth recovery, Peng Wensheng, analyst at the Barclays Capital, said in an e-mailed statement to Xinhua.

Although exports, another bedrock that fueled China's fast growth in the past few years, fell on a year-on-year basis last month, there were signs of improvement.

China's foreign trade figures were better than they looked on the surface. July exports fell 23 percent from a year earlier, but increased 10.4 percent from June. Imports declined 14.9 percent year on year last month, but rose 8.7 percent month on month.

According to the General Administration of Customs, the country's foreign trade has risen since March measured from month to month, and the trend of recovery had stabilized.

Improvements in these data indicated China's economy was recovering and the government's policies to boost domestic demand and stabilize foreign trade had paid off, said Zhang Yansheng, a researcher with the National Development and Reform Commission (NDRC), the country's economic planner.

Among other statistics released Tuesday, industrial output climbed 10.8 percent in July from a year earlier, quickening from 10.7 percent in June and 8.9 percent in May. Power generation, an important indicator measuring industrial activities, expanded 4.8 percent in July.

Peng expected the country's economic growth to rise above 8 percent in the third quarter this year and 10 percent in the fourth quarter.

POLICY STANCE UNCHANGED

Despite these positive changes in China's economy, uncertainties still existed in world economic development and some domestic companies and industries faced difficulties, said Song Li, deputy chief of the Academy of Macroeconomic Research under the NDRC.

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