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First-Quarter Economic Upturn
Special> First-Quarter Economic Upturn
UPDATED: April 24, 2009 NO. 17 APR. 30, 2009
Better Than Expected
The statistics are fairly encouraging, as they form a striking contrast with other industrialized and developing economies

The first-quarter economic indicators, released by the National Bureau of Statistics (NBS) in mid-April, have revealed some "better-than-expected" developments in the nation's economy, and considerably cleared up initial concerns that China may be sailing further into the doldrums as a result of the ongoing global economic crisis.

According to NBS statistics, China's gross domestic product (GDP) grew 6.1 percent in the first three months. While this rate represents the lowest growth figure in 17 years, it nonetheless shows the economy has slid only by 0.7 percentage points from the fourth quarter of 2008, much better than the 2.2-percentage-point slide in the preceding quarter. Some observers see this as an indication that China's economic slowdown has been effectively curbed and the economy is on its way to recovery.

The statistics are fairly encouraging, as they form a striking contrast with other industrialized and developing economies, where the raging financial turmoil has inflicted enormous damage. They also serve as ample evidence that the stimulus packages and other regulatory measures adopted by the Chinese Government since late last year have yielded the anticipated results.

In spite of this cheerful note, these figures by no means suggest the Chinese economy will soon bottom out. This is another message the NBS has tried to get across: China is under immense downward pressure, and it is still too early to jump to any overly optimistic conclusions.

From a longer-term perspective, though, the Chinese economy will undoubtedly rebound and regain its previous development momentum. This is an assessment made by some local economists who have based their forecast on the nation's relatively sound financial system, solid fiscal revenues, minimum budgetary deficits, huge foreign reserves, as well as effective institutions and mechanisms developed through years of reforms and restructuring to cope with crises and general economic slumps. Moreover, China is now in the process of implementing intensive industrial and urbanization programs, offering huge market potential. All these factors point to a bright future for China. And given the worsening economic situations elsewhere, the country is likely to be one of the first economies to emerge from the current round of recession, although a full recovery may largely depend on the improvement of other economies as well.

What's also promising is the government's plan to further improve social development by raising people's incomes, investing more in social security, and providing extensive welfare programs in an effort to slash household precautionary savings and drive up consumer confidence. A case in point is the recently unveiled healthcare scheme, an 850 billion-yuan ($125 billion) program aimed at providing basic medical care and health services to all citizens by 2011.

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