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Demand Slows, But Just A Bit
The major change in economic performance in the first half of 2000 –
when GDP growth jumped to 8.2 percent from 7.1 percent last year –
was strength in consumption. Now, however, the official figure for
retail sales growth has fallen from 10.1 percent in the first six
months to 9.1 percent in July. The July number is still solid but it
was driven primarily by food and beverage sales due to unusually hot
summer weather.
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Retail sales are being closely scrutinized because the export boom is
expected to taper off in the second half and the economy will need
another driving force. Domestic demand has been anything but that,
holding GDP back since the onset of the Asian financial crisis. There
is some good news, though. Personal savings expanded by 7.4 percent
in July, not inconsequential but well short of the double-digit pace
through all of 1999. The large difference in the rate of increase
between narrow money M1 and broad money M2 also shows more money is
in circulation, rather than sitting in accounts. And electricity
output, an indicator that historically has been tied tightly to GDP,
has been rising by better than 10 percent this year.
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China
E-Bytes
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| US insurer Chubb Corp. confirmed today that it will start selling
insurance in Shanghai in October. Chubb's license was delayed by
NATO's bombing of the Chinese embassy in Belgrade and the firm's own
desire for a Beijing office. |
| Foreign exchange deposits held at domestic banks jumped 25.9
percent to $117 billion from January through July. These are on top of
official reserves held by the People's Bank. |
| The leadership is getting out and about. Last week Premier Zhu had
an interview with Newsweek in which he stressed environmental issues
and President Jiang had an interview with CBS news today. |
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| Keep
up with the fast changing business environment in
China, the world's biggest and fastest-growing emerging
economy. Sinomania! recommends Orbis
Publications, Experts in Emerging Markets, for
a full range of in-depth coverage on China including
daily/weekly/monthly reports and more. |
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