China's economy grew 9.5 percent in the first quarter of 2005, various social circles show great concern over the economic data of the first quarter. At the press conference it held on April 26, the National Development and Reform Commission released a report on the situation about economic operation in the first quarter. Cao Yushu, spokesperson for the said commission, indicated as he answered reporters' question that the 9.5 percent growth of China's GDP (gross domestic product) shows the strong momentum of China's economic growth, some unwholesome factors in economic development were put under check through macro-regulation.

While expressing his full confidence in China's economic growth, Cao Yushu emphasized that macro-control is presently in a crucial period, if it is slackened off, reversals could appear and all previous achievements would be thrown away, so we must fully understand the necessity, protracted nature and arduousness of macro-control.

He said that the five-faceted problem in the current economic operation merits our attention.

Firstly, the pressure of a rebound in fixed asset investment still exists. Although the increase rate of fixed asset investment has somewhat come down, however, due to the fact that deep-rooted problems related to system, mechanism and growth pattern have not been effectively resolved, the impulse for increasing investment and starting project construction remains very strong in many places, the "soil" that gives rise to the expansion of investment has not been removed, the growth of investment at undue speed is likely to re-emerge when conditions are available.

Secondly, coal, electricity, oil and transportation service remain in short supplies. First, coal continues to be in short supply. Second, there is still a shortfall in power supply.

Thirdly, the profit-making level of some industries has fallen. Blind construction and low-level expansion practiced a few years ago have begun to show their consequences, there is a big increase in the overstocking of products in some enterprises and a downturn in their economic returns. In the first quarter of this year, the profits valued at 3.1 billion yuan made by the cement industry in the same period last year turned into a deficit of 0.35 billion yuan.

Fourthly, structural contradiction related to industrial products export was prominent. And

Fifthly, the prices of capital goods continue to go up. Due to the drive of investment expansion, and the substantial rise in the import prices of international crude oil and iron ores, in the first quarter of this year, the prices for capital goods in the circulation link swelled 6.1 percent on the basis of the respective price hikes of 8.1 percent and 13.6 percent in the previous two years.

By People's Daily Online