China's economy, one of the most robust economies in the world and the biggest contributor to global economic growth, grew 9.9 percent year-on-year in the first three quarters of this year, according to official figures leaked by Li Xiaochao, spokesperson for the National Bureau of Statistics (NBS), at a press conference on Oct 20, showing a trend of slowdown by 2.3 percentage points amid the unfolding global financial crisis. China's economic growth has been on a steady decline since last year, and the global financial turmoil and weaker demand for Chinese exports on international markets have since harassed the Chinese economy.
Despite this, China's economy has maintained stable and relatively fast growth this year, as the 9.9 percent growth rate in the first three quarters was still higher than the annual average growth rate of 9.8 percent since China adopted the reform and opening up policies in the late 1970s. Facing the globe-sized financial turbulence, China still has the confidence in keeping its economy in good shape, Li said.
While releasing these figures, Mr. Li cited 'three considerably' to highlight the hardships that China's economy has gone through over the first nine months of this year: considerably unusual, considerably uncommon, and considerably uneasy, as he remarked. The year 2008 is a year plagued by assorted calamities—snow storm hitting China's southern provinces earlier in the year, and the May12 Sichuan massive earthquake--, causing a deadly loss on people's lives and properties, and meanwhile, delivering a harsh blow to the normal development of China's national economy.
In the meantime, China has to take heavy toll induced by the deteriorating international economic environment and the U.S-born credit crunch, which has been labeled by the IMF as 'the worst ever financial crisis since 1930s.' The unprecedented financial storm has adversely affected China's emerging economy, which is increasingly open to the outside world, and more closely than ever linked to the international economy. It has been estimated that the contribution rate made by imports and exports to economic growth accounted for 12.5 percent in the first three quarters of this year, 8.9 percent points lower than the same period last year.
But analysts still deem China's economic growth would have the ability and vigor to resist risks. 'Unfavorable international factors and the serious natural disasters at home have not changed the basic growth situation of our country's economy,' said the statement posted on a government website. The confidence may be attributed to the ample grain supply all the past five years on end. Agricultural harvest aside, the industrial sector has also seen a steady growth by 15.2 percent in the first three quarters of this year, despite an obvious downward spiral. And the profits gained by industries and enterprises on a national scale have grown by 19.4 percent compared to the same period last year.
On the other hand, exports, one of the three major drivers of the Chinese economy along with investment and consumption, are taking hit from the global financial turmoil and economic slowdown. In the first three quarters exports grew 22.3 percent, 4.8 percent points lower than the same period last year. According to NBS, fixed assets investment totaled 11.6246 trillion yuan ($1.66 trillion) in the first three quarters of 2008, up 27 percent over the same period last year. The growth rate was 0.7 percentage points higher than the first half of this year, or 1.3 percentage points higher than the year-earlier level.
Retail sales, another key economic indicator, increased by 22 percent year-on-year in the first three quarters, and climbed 23.2 percent in September alone. Analysts say China would have to further stimulate domestic consumption in order to push the economy forward amid an export slump. Nevertheless, 'China still has huge potential and leeway to expand domestic consumption,' Li said.
When touching on the side effects of the global financial turmoil on China's future economic development, Li said the global economic instability would have a 'gradual' effect on China's economy. To weather the effects of the global economic turmoil, if it is unavoidable that growth would decline as business profits and public revenues slow, Li advised some potential effects should deserve close attention, such as effects on attracting foreign capitals, effects on the export growth, and effects on the confidence of investors and consumers.
Be that as it may, China's economy has covered a good part of the most arduous journey and will confidently stand up to various tests in the following days, on grounds that the 30 years' reforms and opening up have accumulated the experience and wealth adequate to bolster China's rapid economic growth, China's domestic market still boasts huge potentials to be tapped, and there is enough room for manoeuvre in terms of China's macroeconomic policies. China's economy is still able to maintain a stable growth, as long as the country adopts and keeps to 'flexible and cautious' macroeconomic policies, as is commonly observed nowadays.
By People's Daily Online
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