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China's economy faces challenges despite steady performance

(Xinhua) Updated: 2014-08-28 09:44

Favorable seven months

In the first half of this year, the country's economy grew by 7.4 percent year on year with an unemployment rate of 4.08 percent, both of which met expectations, according to Xu's report.

The net income of rural residents per capita increased by 9.8 percent year on year in the first half of this year while the disposable income of urban residents rose 7.1 percent.

From January to July, a total of 8.58 million new jobs were added, 140,000 more than the figure released at the same time last year.

The consumer price index increased by 2.3 percent, lower than the annual target of 3.5 percent.

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China's economy faces challenges despite steady performance
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Total retail sales of consumer goods increased by 12.1 percent year on year in the first seven months while fixed-asset investment rose by 17 percent, of which investment in infrastructure rose 25 percent.

Industrial restructuring made favorable progress. Investment in industries with excess capacity and high energy consumption, such as steel, cement and nonferrous metal, has slowed down, according to Xu, citing a drop in steel industry investment by 8.3 percent year on year.

Meanwhile, the service sector boomed with added value up 8 percent in the first half of this year and 0.6 percentage points higher than the industrial added value. It contributed to 46.6 percent of the gross domestic product, higher than industry and agriculture.

Slow growth of fiscal revenue

Central and local governments reported slower fiscal revenue growth in the first seven months, according to a report on the 2014 budget, also brought forth for reading on Wednesday.

Fiscal revenues nationwide increased by 8.5 percent year on year in the first seven months. The annual growth of 2013 was 10.2 percent.

Central fiscal revenue totaled 4.06 trillion yuan, a year-on-year increase of 6 percent, while local fiscal revenue was 4.66 trillion yuan with a growth of 10.8 percent.

Revenue growth has slowed down in 24 out of 31 provincial divisions.

Despite the slowdown, the government continued spending on people's livelihood, said Lou Jiwei, minister of finance, when elaborating the report to lawmakers.

Growth of government spending was 6.5 percentage points higher than revenue growth.

The central government spent 1.24 trillion yuan by July, about 55.1 percent of the annual budgeted figure, while local governments spent 6.7 trillion yuan, about 51.5 percent of the annual budget.

Spending on education, cultural service, social insurance and environmental protection increased by 11 percent or more. Health care, community development, infrastructure of transport, housing and agriculture spending was up 16 percent.

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