(China Daily)
Updated: 2008-04-17 07:22

China's economic growth dipped by 1.1 percentage point in the first quarter, from 11.7 percent to 10.6 percent year-on-year. Such a gradual slowdown bears testimony to both the effectiveness of China's macroeconomic control and the resilience of the Chinese economy.

Policymakers should keep cooling the economy to tame runaway inflation. A watchful eye on negative factors is needed to avoid a sharp slowdown. But it is still too early to loosen measures the government has adopted to balance and restructure the national economy.

The growth record in the first quarter marks a desirable slowdown from last year.

For policymakers who are bent on preventing the economy from overheating and prices from soaring through the roof, the deceleration in the first quarter has seemingly laid a solid foundation for them to achieve the two goals.

On the one hand, sizzling investment and export growth have been considerably reined in.

Fixed-asset investment increased 24.6 percent in the first quarter, roughly at the same speed during the same period last year.

Meanwhile, it is particularly noteworthy that China's trade surplus fell by 10.9 percent year on year to $41.4 billion, marking the first quarterly decline in three years. Such a negative drag from trade will not only slow the country's economic growth but also help reduce the country's external imbalance.

On the other hand, the acceleration of inflation seems to have peaked in the first quarter. Though the consumer inflation for the first quarter was 8 percent, a big increase of 5.3 percentage points over the same period last year, that the consumer price index fell from 8.7 percent in February to 8.3 percent last month is an encouraging progress in combating inflation.

Unprecedented domestic and international uncertainties have made the country's macroeconomic control more difficult than ever this year.

However, in spite of the severest winter storm and the looming US recession, the Chinese economy still registered double-digit growth in the first quarter. That will reassure those who have expected sound growth from emerging economies like China to cushion the world economy against the US slowdown.

Policymakers have seized the initiative to win the fight against overheating and inflation. The task ahead is to ensure that it can continue to decelerate without drastic fluctuations.

(China Daily 04/17/2008 page8)