Thursday, December 25, 2008

Somber view of crisis on China

China's legislature heard yesterday a somber report on how the intensifying impact of the world financial and economic crisis is reverberating through China's economy.

Zhang Ping, minister in charge of the National Development and Reform Commission, representing the State Council, or Cabinet, outlined the situation to the Standing Committee of the National People's Congress when he described how, since the third quarter, the impact had spread from coastal areas to inland regions, from export-oriented industries to other sectors, and from small companies to big ones.

Zhang said the deepening crisis and the world economic situation had greatly affected China's economy, with overall growth slowing and imports falling - a situation unseen for many years.

Zhang also noted investment demand had weakened and there were "difficulties" in industrial output, along with falling revenues and profits for business.

Zhang also said China's economy grew 9.9 percent in the first three quarters of this year. Growth in the past two years averaged 11.8 percent, which was above forecasts. Since 2006, the country has created 30.28 million jobs, or 67 percent of the 11th Five-Year Plan (2006-2010) goal.

Consumer prices in the past two years rose by 3.1 percent annually, which was deemed as a stable level, he said.

Zhang said both exports and investment growth were slowing and industrial output was declining, as shown by electricity use. Property and the auto markets were sluggish, unemployment was up and international market turmoil had "shattered" domestic investment sentiment.

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