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China's GDP to grow by 10.5%

By Li Fangchao (China Daily)
Updated: 2006-12-11 06:56

China's gross domestic product (GDP) will exceed 20 trillion yuan (US$2.55 trillion) this year, a year-on-year increase of 10.5 per cent, the country's top economic planner said over the weekend.

The economy has maintained a "momentum of stable and fast development" this year, Ma Kai, minister of the National Development and Reform Commission, told an annual national assembly of heads of local development and reform commissions.

Growth was robust in the first three quarters: 10.3 per cent, 11.3 per cent and 10.4 per cent; and it will be the fourth consecutive year GDP growth has hovered around 10 per cent.

Consumer prices are likely to rise 1.3 per cent and more than 10.5 million jobs will be created this year, Ma said.

With a slowdown in urban fixed asset investment, Ma said macro-economic controls imposed by the central government are beginning to take effect.

Fixed asset investment in cities rose 26.6 per cent from January to November, 4.5 percentage points lower than in the first half of the year.

Despite this, the overall scale of construction remains mammoth, Ma said.

It is estimated that projects under construction this year would be worth 32 trillion yuan (US$4.08 trillion), an increase of 5 trillion yuan (US$639 billion) over the previous year.

"The relentless investment increase has yet to be stopped," Ma said, blaming some local governments and banks for fanning investment expansion.

Maintaining a stable economy and avoiding large fluctuations remain key objectives of macro controls, Ma said.

Lowering energy consumption and reducing pollutant discharge are also an important part of economic restructuring, he said.

The country has set a target of reducing energy consumption by 20 per pent for each unit of GDP; and 10 per cent of main pollutants by 2010.

However, official figures show that energy consumption per unit of GDP rose 0.8 per cent in the first half of this year, posing barriers to achieving this year's targets, Ma said.

He vowed to get tough with any illegal construction that fails to get government approval in terms of land-use rights and environment protection.

Energy-saving appraisals will also be required for approval of projects, Ma said.

He said that in collaboration with the National Bureau of Statistics and the State Environmental Protection Administration, the commission is formulating a scientific energy consumption reduction index system as well as assessment and surveillance systems to prod local officials to meet energy use reduction goals.

Steel, non-ferrous metals, coal, electricity, oil refinery and construction materials will be under special scrutiny.

(China Daily 12/11/2006 page1)



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