China to fine-tune economy amid slowdown

The State Council， China’s Cabinet， on Apr. 13 vowed to strengthen the finetuning of the economy in a timely manner in order to cope with new circumstances as the first quarter GDP registered the lowest growth rate in nearly three years， Xinhua News Agency reported.

The economy is currently in a generally stable state， but faces many difficulties and challenges. Efforts should be made to leave more room for new policies and prepare for hardships and tests， according to an executive meeting of the State Council presided over by Premier Wen Jiabao.

The government pledged to improve macro-regulation， enhance demand management and make policies more targeted， flexible and forward-looking， according to a statement issued after the meeting.

The statement came hours after data showed the GDP of the world’s secondlargest economy grew 8.1 percent in the first quarter from a year earlier， the lowest in 11 quarters.

China’s GDP slowed throughout all of 2011， from 9.7 percent in the first quarter to 8.9 percent in the last quarter， as external demand waned from the United States and the European Union， China’s major trade partners.

The government will work to enhance domestic demand by boosting consumption and retaining a proper investment scale while ensuring funding for key investment projects， the statement said.

“Concrete efforts should be made to break up monopolies， relax restrictions on market access and boost the momentum of private sector investment，” it said.

It reiterated that the government will continue a campaign to curb property prices and speculation. The government has vowed to build more ordinary commercial housing and construct more affordable homes.

The government will also strive to clean up local government debts and push forward reforms in major fields， including the fiscal， taxation and financial systems， resource commodity pricing， income distribution and healthcare.

Other tasks on the government’s work agenda also include achieving a bumper harvest this year， ensuring the overall stability of consumer prices， maintaining stable foreign trade growth and improving people’s livelihood， according to the statement.

China to steadily make yuan convertible on capital account

China’s foreign exchange regulator said on Apr. 10 it will advance the yuan’s convertibility on the capital account in a stable and orderly way， although it is not the fundamental goal of the country’s foreign exchange reform.

It is a gradual process， and also a systematic project that needs the coordination of many departments to offset external impacts， the State Administration of Foreign Exchange (SAFE) said in a statement on its website.

China has only allowed the yuan’s convertibility on the current account. A full convertible yuan is the prerequisite of making it an international reserve currency.

According to the statement， China will expand the use of the yuan in crossborder trade and gradually increase the channel for capital outflows.

The government will encourage eligible institutions to invest in foreign countries. It will also gradually open the domestic financial market and build up a system to ward against the impacts arising from the free capital flows， it said.

SAFE noted it will closely monitor domestic and international economic operations， and keep the convertibility promotion measures in line with the micro-economic environment and financial supervision. While partly loosening the restrictions， it will also improve the oversight to safeguard the country’s financial security.

China has been progressively and cautiously advancing the yuan’s convertibility on the capital account. Since the start of the global financial crisis， China has signed currency swap agreements worth 1.5 trillion yuan with 17 countries and regions to support its trade and investment with these economies.

Figures

9.1%

Chinese state-owned enterprises(SOEs) saw profits fall 9.1 percent year on year to hit 482.86 billion yuan(76.71 billion U.S. dollars) during the first quarter of 2012， the Ministry of Finance said on Apr. 18.

94.5%

China’s non-financial overseas direct investment (ODI) surged 94.5 percent year-on-year to 16.55 billion U.S. dollars in the first quarter of this year， the Ministry of Commerce announced (MOC) on Apr. 17.

14.7%

China’s fiscal revenue in the first quarter of the year rose 14.7 percent from the same period last year to hit nearly 3 trillion yuan (475.81 billion U.S. dollars)， the Ministry of Finance said on Apr. 13.

14.8%

China’s retail sales grew 14.8 percent year-on-year to 4.9319 trillion yuan (770.6 billion U.S. dollars) in the first quarter of this year， according to figures released by the NBS on Apr. 13.

11.6%

China’s industrial value-added output grew 11.6 percent year-on-year in the first quarter of 2012， according to figures released by the NBS on Apr. 13.

3.58m

Hong Kong’s manpower supply is projected to increase at an average annualrate of 0.6 percent from 3.42 million in 2010 to 3.58 million in 2018， the city’s Labor andWelfare Bureau said in the Report on Manpower Projection to 2018 released on Apr. 13.

20.9%

China’s urban fixed asset investment rose 20.9 percent yearon-year to 4.7865 trillion yuan (761.22 billion U.S. dollars) in the first quarter of 2012， new official statistics have shown.