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China : Supply-side contributions to growth, Monthly inflation, year to year growth

3.9.3 Supply-side contributions to growth Agriculture Industry Services GDP Percentage points 12- 9_ 0. 2008 2009 2010 2011 2012 Sources: National Bureau of Statistics, People's Republic of China. http://www.stats.gov.cn/english/ (accessed 4 February 2013); ADB estimates. 3.9.4 Monthly inflation, (year-on-year growth) Food prices - Overall consumer price index % 24- 18_ 12- 6_ -6- Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Feb 2008 09 10 11 12 13 Source: CEIC Data Company (accessed 11 March 2013). 3.9.5 One-year benchmark lending rate and required reserves 1-year benchmark Required reserves - lending rate % of large banks % 7.0_ _23 6.5_ _22 6.0 21 5.5_ _20 5.0. 19 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2012 Source: CEIC Data Company (accessed 4 February 2013). 3.9.3 Supply-side contributions to growth Agriculture Industry Services GDP Percentage points 12- 9_ 0. 2008 2009 2010 2011 2012 Sources: National Bureau of Statistics, People's Republic of China. http://www.stats.gov.cn/english/ (accessed 4 February 2013); ADB estimates. 3.9.4 Monthly inflation, (year-on-year growth) Food prices - Overall consumer price index % 24- 18_ 12- 6_ -6- Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Feb 2008 09 10 11 12 13 Source: CEIC Data Company (accessed 11 March 2013). 3.9.5 One-year benchmark lending rate and required reserves 1-year benchmark Required reserves - lending rate % of large banks % 7.0_ _23 6.5_ _22 6.0 21 5.5_ _20 5.0. 19 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2012 Source: CEIC Data Company (accessed 4 February 2013).

China : Supply-side contributions to growth, Monthly inflation, year to year growth

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The People's Republic of China (PRC) is deepening reforms; transforming its economic structure; and rebalancing growth toward a consumption-driven, service-oriented, and environmentally sustainable ec... onomy. Growth by economic sector varied from 8.1% in industry and services to 4.5% in agriculture. Growth in the industry sector—by far the largest component of GDP—declined by 2.2 percentage points year on year, contributing the most to GDP deceleration (Figure 3.9.3). Growth in services suffered less than industry, and growth in several high-end services including information, design, and creative industry outperformed traditional services, suggesting upward sophistication in the sector. Improved weather and government support to agro-services contributed to making agriculture the only sector in which growth accelerated .Measured by the consumer price index (CPI), inflation gradually slowed in 2012 from 4.5% year on year in January to 2.5% in December (Figure 3.9.4). For the year as a whole, the CPI declined to 2.6% from 5.4% in 2011. Improved supplies of food, mainly pork, and better weather contained the rise in food prices, the largest category in the CPI basket. The stabilization of housing prices also contributed to the moderating trend. Fiscal policy supported growth through consumption subsidies and more favorable fiscal treatment of the service sector and small and medium-sized enterprises. In 2012 the consolidated fiscal deficit was modest at 1.6% of GDP, and bank borrowing to cover it raised total domestic public debt, including local government debt, to 54% of GDP. Fiscal expenditure grew by 15.1% and revenue by 12.8%. A gradual shift in focus toward social expenditure was reflected in higher support to education, up by 28.3%. On the revenue side, corporate income tax collection increased by 17.2% in line with improved enterprise profitability, while individual income tax revenue declined by about 4% following the late 2011 raise in the income threshold at which individuals pay taxes. With taxation at the forefront of the reform agenda, the government announced plans to expand property taxes piloted in Shanghai and Chongqing to other cities and gradually establish a nationwide property tax system to keep real estate from overheating and provide a steady income to local governments. Similarly, the trial replacement of the business tax with a value-added tax was extended to new provinces and municipalities. The program covers telecommunications, rail transportation, construction, and business services. Monetary stance was accommodative in 2012. Lower inflation and declining growth prompted the central bank to cut both the 1-year benchmark interest rate and the reserve requirement ratio twice in 2012 (Figure 3.9.5). Nevertheless, money supply (M2) grew by 13.8%, in line with the government’s target of 14.0%. Total social financing, a measure of liquidity outside M2, rose by 22.8% to CNY15.8 trillion at year-end, which is almost double the CNY8.2 trillion in new bank lending. The rise highlights the rapid development of such untraditional sources of liquidity as trust loans, bond issuances, entrusted loans, and bank acceptance bills, which do not fall easily under central bank control.

China : Supply-side contributions to growth, Monthly inflation, year to year growth

China : Supply-side contributions to growth, Monthly inflation, year to year growth

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