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How to interpret China's economy in first half of 2007? |
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17:03, July 23, 2007 |
Consumption reported a rapid growth in the first half of the year. There are three main reasons.
First, the rapid growth of resident income promoted the increase of consumer demand. Thanks to good benefits of enterprises, income level of staff workers generally increased. In addition, the government has implemented a series of policies such as increasing civil service's wage, providing subsidies to low-income residents, raising the minimum wage of migrant workers and supporting agriculture by introducing various preferential agricultural policies. As a result, the income of both urban and rural residents surged significantly. Per capita disposable income of urban residents grew by 14.2%, four percentage points higher than that of the same period of last year. The actual growth rate of cash income of farmers reached 13.3%, 1.4 percentage points higher on a year-on-year basis and 1.2 percentage points higher than that of the first quarter.
Second, governments of different levels have increased input into social security, and made great efforts to improve education, health, housing and other livelihood issues. Residents are more optimistic for the future. With their confidence being strengthened, consumer demand also increased.
Third, the pace of consumption upgrading has been accelerated. Among the limit-above merchandises, the wholesale and retail of automobile rose 36.7%; household appliances and audio-visual equipments grew by 20.7%; construction and decoration materials increased 41%; furniture rose 43.4%. The growth rates of above categories were 9, 1.5, 16.6 and 22.6 percentage points higher than those of the same period last year respectively. This shows that the consumption in key areas such as automobile and housing was growing at a rapid rate.
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