China's GDP grows 11.5% in first half year





BEIJING, July 19 (Xinhua) -- China's gross domestic product (GDP) rose 11.5 percent in the first half of the year, after it grew 11.9 percent in the second quarter, official figures revealed on Thursday.



The growth rate for the first half is 0.5 percentage points higher than the same period last year and much faster than the planned eight percent, spokesman Li Xiaochao with the National Bureau of Statistics told a press conference.



Consumption, the previously weakest engine compared with exports and investment, has caught up as retail sales grew 15.4 percent in the first half, 2.1 percentage points more than the rise in the same period last year. Fixed assets investment rose 25.9 percent, down 3.9 percentage points.



"The changes in domestic demand since the beginning of the year are what we were expecting," Li said, attributing the faster consumption to the rising income of the public.



China has used a full arsenal of industrial and taxation policies to help the poor, including subsidizing low-income families and farmers, increasing minimum wages and investing more in education, medical care and housing.



"We are keeping a close watch on what direction the accelerated economic growth is taking," said Li, "but whether or not the economy is overheated is a comprehensive issue that should be viewed from different angles."



With most key economic figures soaring in the second quarter, fixed asset investment slowed down and exports grew no faster than last year, said Li, rebuffing concerns that China's economy was becoming overheated.



"A comprehensive viewpoint requires us to look at not only economic growth but also prices and supplies of staple goods."



Although rising prices for foodstuffs - including grain, meat, poultry and eggs - pushed China's consumer price index (CPI) up to a 28-month high of 4.4 percent in June and 3.2 percent in the first half, the country's core CPI, with foodstuff and energy prices deducted, rose only 0.9 percent in the first half.



Prices for transportation, telecommunications, entertainment, education and cultural products declined, said Li.



The statistics bureau spokesman also said China had greatly improved the "material base" that sustained its economic development, with infrastructure and basal industries strengthened thanks to the macro control policies over the past four year.



However, Wang Xiaoguang, a researcher with the National Development and Reform Commission, said the new economic data indicated the economy was showing a more obvious tendency to overheat and further moves to restrain growth would be "triggered at any time" in the latter half of the year.



"China has not yet rid itself of its heavy reliance on energy-consuming industries for growth," said Fan Jianping, a macroeconomic researcher with the State Information Center.



"Without improvement in economic structure, short-term control policies will fail to change the pattern of economic growth," said Fan.



China's economy has maintained double-digit growth for four consecutive years and the newly released figures are likely to putthe world's fourth largest economy on track for a growth above 10 percent this year.



The Chinese government last week revised the 2006 GDP up by 146.4 billion yuan over the preliminarily calculated figure to 21.0871 trillion yuan (2.7 trillion U.S. dollars), moving the country even closer to overtaking Germany as the third largest economy.



"With Germany growing at a rate of 2.5 percent, the gap between China and Germany is narrowing," Li said.

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