The Chinese economy has been showing positive signs this year with its first quarter performance better than expectations.
According to the preliminary figures, China's gross domestic product (GDP) in the first quarter of 2009 reached RMB 6.5745 trillion ($962.6 billion), up 6.1 percent year on year, a decline of 4.5 percentage points compared with the growth rate for the same period last year.
1. Agriculture production has been maintaining sound growth momentum, with increased acreage for grain crops observed.
2. Industrial output in China recorded stable growth in the first quarter, though with reduced profits for enterprises. In the first quarter this year, the industrial output of major industrial enterprises with annual sales of more than RMB 5 million saw a rise of 5.1 percent, 11.3 percentage points lower than the increase rate for Q1 2008.
In the January-February period of 2009, the aggregate profits of China's major industrial enterprises were down 37.3 percent to RMB 219.1 billion ($32.1 billion).
3. Fixed assets investments grew rapidly in the first quarter this year, with an improvement observed in investment structure. In the first quarter, China's fixed assets investment rose 28.8 percent to RMB 2.8129 trillion ($411.8 billion), up 4.2 percentage points on the Q1 2008 increase rate. Urban fixed assets investments were up 28.6 percent to RMB 2.3562 trillion ($345 billion), up 2.7 percentage points year on year. Looking at the various regions, investment in the central and western regions grew faster than that in the east, with the growth rates in the east, central and west reaching 19.8 percent, 34.3 percent and 46.1 percent respectively.
4. Domestic market consumption maintained steady and rapid growth. In the first quarter, China's retail sales went up 15.0 percent to RMB 2.9398 trillion ($430.4 million).
5. Consumer prices declined on a year-on-year basis, with a smaller month-on-month decrease observed in producer prices. In the first quarter, the consumer price index was down 0.6 percent year on year; meanwhile, the producer price index was down 4.6 percent, with a decrease of 7.1 percent recorded in purchase prices for raw materials, fuel and power.
6. China's foreign trade volume slumped considerably, with a rapid drop seen in direct foreign investment. In Q1, China's combined imports and exports totaled $428.7 billion, down 24.9 percent year on year. China's trade surplus rose $20.9 billion to $62.3 billion. Meanwhile, direct foreign investment reached $21.8 billion, down $5.6 billion year on year.
7. Incomes of both urban and rural inhabitants saw a continuous increase. In the first quarter, the average per capita disposable income of China's urban population was RMB 4,834 ($708), up 10.2 percent year on year, representing an actual growth rate of 11.2 percent after discounting the effect of price factors. Meanwhile, rural residents saw their per capita income increase by 8.6 percent to RMB 1,622 ($237).
8. Monetary supply registered accelerated growth in the first quarter, with a rapid rise seen in loans. By the end of March, broad money M2 reached RMB 53.1 trillion ($7.77 trillion), up 25.5 percent year on year and up 7.7 percentage points over the previous year. Loans issued by Chinese financial institutions totaled RMB 34.9555 trillion ($5.1179 trillion), up RMB 3.2485 trillion ($475.6 billion) year on year. By the end of March, the national foreign exchange reserve came to $1.9537 trillion, an increase of $7.7 billion compared with the end of 2008.
The main difficulties faced by the Chinese economy include slumping export demand, falling company profits and fiscal revenue, and increasing unemployment, all contributing to downward pressure opposing an economic recovery.