07/20/2005, 00.00
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China's economy grew 9.5 per cent in first six months of 2005

Despite Beijing's attempts to slow growth, figures for the first half of year show a constant upward rate. But the price being paid for this growth remains high.

Beijing (AsiaNews) – China's economy grew 9.5 per cent in the first half of 2005, National Bureau of Statistics said. The growth rate held steady, falling by just 0.2 percentage points from the same period last year.

"The national economy continued to develop in the expected direction of macro-regulation and control," the Bureau said in a statement. "The overall situation is good."

Beijing had however set its growth target for 2005 at between 8 percent and 8.5 per cent.

Total gross domestic product between January and June reached 6.7 trillion yuan (more than € 6.7 billion, US$ 8 billion).

China's growth has been the highest among the larger economies in terms of overall growth and industrial production. But this has come with a heavy price tag that has taken various forms.

Rising energy demands are one such forms, and in China this has meant greater coal output.

The country's 25,000 mines satisfy 70 per cent of the domestic energy demands but mining accidents have killed more people than traffic accidents and fires.

In the first four months of the year, there have been 1,113 recorded deaths, a 20 per cent increase over last year.

Mines have suffered structural collapse because of blasts or bad maintenance at a rate 44 per cent higher compared to 2004.

In order to fill the 30 per cent gap in its energy needs, China has to rely on imports. But high demand for oil, gas and iron ore have pushed up the cost of finished products and of services.

The consumer price index rose 2.8 per cent in the first quarter of the year, whilst prices for manufacturers went up 5.6 per cent.

Inflation peaked at 5.6 per cent last year and has been dropping because of the government's attempt to slow down investments in some industrial sectors.

Economic growth is also widening a regional gap between the economically poor and socially deprived West and the rich provinces of eastern China and those of the southern coast.

Every year, some 150 million workers are forced to move from the poorest to the richest provinces where they provide cheap labour.

Wages are low even by Chinese standards and working conditions are inhuman. Construction and manufacturing are largely dependant on migrant workers.

According to Prof Li Jianfei of Beijing's Renmin (People's University), more than 90 per cent of workers in China do not have a contract and are not regularly paid.

Economic growth is also closely tied to widespread popular resentment against the policies of the Communist Party and the abuses inflicted on rural residents.

Demonstrations in China rose from 10,000 in 1994 to 74,000 in 2004 according to data released by public security authorities.

Topping the list of cause are pollution (directly tied to unregulated industrial plants), land grabs (expropriations at the expense of small landowners to the benefit of large Chinese and multinational companies) and corruption among local government officials.

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