On March 18, Premier Wen Jiabao presided over an executive meeting of the State Council, discussing the economic situation at home and abroad. The attendees agreed that the international financial crisis is still spreading and deepening, and that China is still facing huge difficulties despite the signs that some regions and sectors in China have seen stabilization and recovery.
"Signs of stabilization and recovery" have given China more confidence, while "the huge difficulties and problems" have made the country more sober-minded.
The challenges are indeed serious, but opportunities still lie ahead. As long as the country combines "ensuring growth" with "adjusting structure" and "improving the economy," it will be able to escape the depression earlier in time to embrace a splendid spring.
Sign One: Investments maintain rapid growth
In January and February, total investment in fixed assets for all urban and rural areas was 1.0276 trillion yuan, up 26.5 percent compared to the same period last year, indicating that the policies for expanding investment have started to take effect. In the first two months of 2009, 18,533 new projects were started, an increase of 4,056 projects year-on-year.
Even more splendid was the fact that funding for the projects had been fully secured. Of urban and rural investments, 1.8367 trillion yuan was appropriated in a timely fashion, an increase of 33.6 percent year-on-year.
Investment has laid a foundation for the economy of China to escape this predicament.
Sign Two: Vehicle and building material sales start to recover
In January and February, China's gross retail sales of consumer goods rose 15.2 percent year-on-year to 2.00804 trillion yuan. The growth rate was 5 percentage points lower than the same period last year.
"The 15.2 percent growth rate is considerably good, since there was negative growth in the CPI in February this year. The inflation-adjusted growth is equivalent to that of the same period last year." said Cai Zhizhou, a researcher at the China Center for National Accounting and Economic Growth at Peking University.
In terms of industry, the sales for some goods, such as vehicles and building materials, have also shown signs of recovery, with an increase of 9.3 percent in the auto industry and growth of 22.4 percent in the building and furnishing materials industry.
Sign Three: Consumer credit increases rapidly
By the end of February, the broad money supply (M2) was up 20.48 percent compared with last year and up 1.69 percentage points from the end of the previous month, far higher than the goal of 17 percent growth in M2 set by China for 2009, indicating sufficient liquidity. The narrow money supply (M1) grew 10.87 percent year-on-year, an increase of 4.19 percentage points compared to the end of January showing a slight rise.
This indicates that manufacturing activities have rebounded to some extent, more credit loans have been transferred to the real economy, and the decrease of enterprise inventories is expected to be wrapped up earlier than expected.
In February, consumer loans increased to 43.9 billion yuan, up 33.9 billion yuan year-on-year, maintaining rapid growth momentum through January, showing that consumer loans are recovering, and that the consumption stimulus policies are gradually taking effect.
Sign Four: Corporate financial condition improves
Industrial added value in January and February rose 3.8 percent year-on-year, with industrial added value increasing 11 percent in February year-on-year. In the same month, the Purchasing Managers Index of China's manufacturing industry was 49 percent. Specifically, the new orders index and production index bounced to 50.4 percent and 51.2 percent respectively, surpassing the 50 percent mark that distinguishes a bull market from a bear market. A trend of economic growth rebounding is taking shape.
Corporate deposits increased by 995.4 billion yuan, up 808.5 billion yuan year-on-year. This reveals that the capital turnover and payment abilities of enterprises have improved.
In addition, China's enterprises consumed 217.3 billion kilowatt-hours of electricity nationwide in February, up 1.8 percent year-on-year.
Sign Five: Sectors benefiting from "4 trillion stimulus package" likely to recover first
In February, the production of raw coal, cement and steel nationwide increased at a relatively fast pace compared with last year. Raw coal output reached 196.565 million tons, an increase of 16 percent year-on-year; the output of cement grew to 82.9 million tons, an increase of 42.5 percent year-on-year; while the output of steel climbed to 46.134 million tons, an increase of 8.3 percent year-on-year. Sectors closely linked to the 4 trillion yuan investment are likely to recover ahead of others.
Sign Six: Signs of recovery in major business sectors in Chongqing
According to the Chongqing Statistics Bureau, signs of recovery have been emerging in major business sectors in Chongqing since February.
Industrial economy, which was hit hard by the financial crisis, is beginning to recover showing an upward trend, a contrast to its downward movement in January. Industrial added value in February increased 18.1 percent year-on-year, and consumption of electricity by enterprises has basically returned to normal. There are notable signs of recovery in major business sectors and in industrial production. Chongqing produced a total of 71,100 automobiles and 469,400 motorcycles, increases of 24.4 percent and 11.4 percent respectively year-on-year.
Rail loading capacity, which had been dwindling from September last year, stopped falling and climbed from 916 freight cars in February to 1,090 freight cars in the first week of March, showing clear signs of economic recovery, said the Department of Economic Operations of the Chongqing Economic Commission.
Sign Seven: Enterprises in Zhejiang Province operating relatively well
The latest survey by the Zhejiang Provincial Bureau of Statistics shows that enterprises in Zhejiang Province are operating relatively well, and 98 percent of industrial enterprises above a certain scale have continued operations.
Of the 57,188 enterprises in Zhejiang's database of industrial enterprises above a certain scale, only 251 enterprises did not continue operations in January, and 1,037 in February, accounting for 0.4 percent and 1.8 percent respectively.
A survey in early March conducted on enterprises below the certain scale shows that 71.6 percent of these enterprises maintained normal operations, up 11.4 percentage points compared with last November. Of the enterprises, 11.7 percent increased their use of labor, and the use of labor in 66.7 percent of the enterprises was on par with the same period of last year.
Sign Eight: Use of foreign investment in Tianjin maintains its upward trend
Use of foreign capital in Tianjin is maintaining an upward trend, according to the latest statistics from the Tianjin Municipal Bureau of Statistics.
In February, Tianjin approved 40 new foreign-funded enterprises, with a total of 954 million USD of contracted foreign capital, an increase of 23.6 percent year-on-year. The amount of foreign capital actually used was 740 million USD, up 25.5 percent year-on-year. In particular, the Binhai New Area recorded 620 million USD in contracted foreign capital, accounting for 65 percent of the city's total contracted foreign capital.
In January and February, the cumulative number of Tianjin's newly-approved foreign-funded enterprises reached 76, with contracted foreign capital of 2.2 billion USD. The total amount of foreign capital actually used was 1.5 billion USD, up 20 percent year-on-year.
By People's Daily Online
http://paper.people.com.cn/rmrb/html/2009-03/20/content_215436.htm
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