In general, the economic situation is improving. Experts and scholars generally believe that the downtrend of China's economy has initially been curbed, and is now picking up momentum. However, economic growth has not yet stabilized and China's economy is still in a difficult period. Mixed economic data from the first few months of this year indicates that expansionary policies have not yet fully offset the impact of rapid economic decline.
Growth in foreign demand is not optimistic. It is expected that in the second half of this year the world economy will continue to shrink. The decline in China's exports will continue to narrow.
Domestic demand has begun to expand. Investment performance has been outstanding this year, and has become a key force boosting China's economic development. It is generally believed that there is still great potential for China's consumer demand to grow. The severe employment situation will lead to a slowdown in the growth rate of urban residents' income and it will also become more difficult for farmers to increase their income. This will lead to a drop in consumption growth however consumer demand will essentially remain stable.
Economic structure is being optimized. While the development of low-end industries is slowing down, the development of the infrastructure and service industry is accelerating. The role that high-tech industries play in advancing all industries is becoming more important. Key economic indicators in central and western regions are improving significantly faster than those in eastern regions. Urban and rural residents' income continues to grow steadily, which is conducive to increasing residents' purchasing power and expanding consumer demand.
The effects of economic policies are gradually emerging, while the central government's economic stimulus policies and measures are beginning to show results. The implementation of fiscal and monetary policies has been better than expected. Credit is increasing rapidly, and signs of inflation turning into deflation have improved.
In 2009, China's economic growth rate is expected to be only about 5 percent. Once all measures are implemented, the annual economic growth rate is expected to increase by more than 2.6 percentage points over the entire year.
By People's Daily Online
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