National Economy

In the first three quarters, the nation's economic performance showed a pattern of fast growth, steady development and good quality. It is expected to be a fairly good kick-off for the 11th Five-Year Plan, said the National Bureau of Statistics (NBS).

GDP. According to preliminary estimation, the gross domestic product (GDP) of China in the first three quarters was 14.15 trillion yuan, a year-on-year increase of 10.7 percent (see graph 1). It was 0.8 percentage points higher than that in the same period last year, but 0.2 percentage points lower than that in the first half of this year. Of this total, the added value of the primary, secondary and tertiary industries grew 4.9 percent, 13 percent and 9.5 percent, respectively, year on year (see graph 2).

Agriculture. Another good harvest was seen in grain production. From January to September, the total output of summer crops reached 113.8 billion kg, jumping 7.4 billion kg, or 7 percent, over the same period of last year. The output of early rice was 31.9 billion kg, maintaining the same figure as in the same period last year. The growing of autumn crops is encouraging. During this period, the total output of pork, beef, mutton and poultry was 56.69 million tons, climbing 4.1 percent over a year ago.

Industrial Growth. In the first nine months, the added valued completed by all the state-owned enterprises as well as non-state enterprises with annual sales revenue of more than 5 million yuan totaled 6.22 trillion yuan, up 17.2 percent year on year (see graphs 3 and 4). It was 0.9 percentage points higher than the rate in the same period last year while 0.5 percentage points lower than that in the first half of this year. In September alone, the industrial enterprises above this designated size generated added value of 775.4 billion yuan, increasing 16.1 percent from a year ago.

In the first three quarters, added value of the heavy industry and light industry rose 18.2 percent and 14.9 percent, respectively, year on year. Production and sales in the period were well connected, with the sales ratio of industrial enterprises above this designated size standing at 97.84 percent.

Fixed Assets Investment. In the January-September period, the fixed assets investment of the country amounted to 7.19 trillion yuan, shooting up 27.3 percent compared with the same period last year. It was 1.2 percentage points higher than the growth in the same period last year, but 2.5 percentage points lower than that in the first half of this year.

Of this total, the investment in urban areas reached 6.19 trillion yuan, growing 28.2 percent year on year, 0.5 percentage points higher than that a year ago. In September alone, fixed assets investment in urban areas was 928.6 billion yuan in September, up 23.6 percent over the year-earlier period.

Among the investment in urban areas in this period, that in real estate development was 1.29 trillion yuan, up 24.3 percent and 2.1 percentage points higher than that in the same period last year. Fixed assets investment in heavy industry and light industry surged 30.2 percent and 36.5 percent, respectively, year on year (see graph 5).

Retail Sales. From January to September, total retail sales of consumer goods reached 5.51 trillion yuan, rising 13.5 percent compared with the same period last year, 0.5 percentage points higher over a year ago. The real growth was 12.6 percent after deducting price factors, which was 0.5 percentage points higher than the rate in the same period last year. In September alone, retail sales of consumer goods registered growth of 13.9 percent to 655.4 billion yuan.

Of the total retail sales, those in urban and rural areas reached 3.72 trillion yuan and 1.78 trillion yuan, up 14.1 percent and 12.3 percent, respectively, year on year. By sector, the retail sales by the wholesale and retail sector was 4.64 trillion yuan, increasing 13.5 percent and those by the hotel and catering sector stood at 749.3 billion yuan, rising 15.8 percent from a year ago. During the period, retail sales of telecommunications equipment, petroleum and petroleum products as well as automobiles were up 23.8 percent, 37.1 percent and 26 percent, respectively, year on year.

Prices. Market prices were basically stable. The consumer price index (CPI) rose 1.3 percent in the first three quarters (see graph 6). The index was up 1.3 percent in cities and 1.2 percent in rural areas. In September alone, the CPI went up 1.5 percent over the year-earlier period. In the first nine months, prices of food grew 1.8 percent and those of services were up 2 percent. The retail prices of commodities inched up 0.8 percent on the year-on-year basis.

The producers' price index for manufactured goods (PPI) rose 2.9 percent and the purchasing prices of raw materials, fuels and power jumped 6.3 percent, respectively, year on year. In September alone, the PPI rose 3.5 percent and the purchasing prices of raw materials, fuels and power jumped 6.9 percent.

In the first nine months, the selling price of houses in 70 large and medium-sized cities went up 5.6 percent, which was 2.4 percentage points lower than the growth in the same period last year. In September alone, housing prices rose 5.3 percent compared with the same period last year.

Personal Income. Urban and rural residents' income increased rapidly. In the first three quarters, the per-capita disposable income of urban residents was 8,799 yuan, a year-on-year increase of 10 percent in real terms after deducting price factors, which was 0.2 percentage points higher than that in the same period last year. The per-capita cash income of rural residents was 2,762 yuan, rising 11.4 percent in real terms, maintaining the same as in the same period last year.

According to the NBS, achievements brought by macro-control measures should be further enhanced, structural contradictions are still outstanding, natural disasters in some areas are severe, and pressure due to limited resources and fragile environment is considerably high.

Social Security Fund

China's Social Security Fund gained investment income of 12.14 billion yuan in the first nine months, at a yield of 6.01 percent, said Xiang Huaicheng, Chairman of the National Social Security Fund Council. Thanks to the bullish stock market in the first half of this year, stock investment contributed 50 percent of the total income.

The total assets of the fund reached 255.4 billion yuan at the end of September, while the figure stood at 211.78 billion yuan at the end of 2005. Stock investment accounted for 23.46 percent of the total assets.

Xiang stressed the need for a cautious investment policy, saying the council will improve its investment returns while giving top priority to risk control. He called for a long-term view of the fund, which seeks stable, long-term returns. The council is eyeing overseas markets in order to broaden investment channels, said Xiang.

The fund lost 919 million yuan on the stock market in 2004 when the council decided to expand stock investment but failed to foresee the bearish movement of the market that lasted more than a year.