Economic growth slows, inflation eases

By Wang Yanlin  |   2008-7-17  |     ONLINE EDITION

CHINA'S economic growth slowed in the first half of this year while the inflation rate also eased, both moving in line with expectations, the National Bureau of Statistics said today.

The major challenge in the future remains fast expanding consumer prices and macroeconomic policies will continue to be stable and consecutive, said Li Xiaochao, the bureau's spokesman.

The country's gross domestic product grew 10.4 percent in the first half to 13.06 trillion yuan (US$1.92 trillion), down 1.8 percentage points from the same period last year. It slowed from 10.6 percent in the first quarter this year and 2007's 11.9 percent.

The Consumer Price Index, the main gauge of inflation, settled at 7.9 percent in the first half. In June, it eased to 7.1 percent from 7.7 percent in May.

"China's economy is moving away from the risks of overheating and the growth rate has fallen within an expected range thanks to effective macroeconomic policies," said Li during a live press conference in Beijing.

"The growth of consumer prices has shown a slowing trend although the inflation rate is still at a relatively high level. The macroeconomic policies will keep stable," he said.

He stressed the first-half economic outcome was hard-earned because China had to weather challenges of surging commodity prices on the global market, natural disasters and big fluctuations in global stocks, foreign exchange and futures markets.

The Beijing Olympics will play a positive role in the economy, but its influence won't be very large given the nation's huge economic aggregate, said Li.

He took South Korea and the United States as examples. In 1988 when South Korea hosted the Summer Olympics, its economy achieved double-digit growth while the United States recorded a moderate 3.7-percent economic expansion when it held the 1996 Summer Games.