The Press Conference on the Province`s Economic Development
(2.30 pm, on 27 June 2008)

The press conference was chaired by Liu Baoju, deputy director of the Publicity Department of Shandong Provincial Party Committee and spokesman of Shandong Provincial People`s Government.

Liu Baoju: Good morning, friends from the press, ladies and gentlemen. Today, we hold a Provincial Government press conference and have invited Mr. Zhu Zhiming, vice chairman and spokesman of the Provincial Development and Reform Commission and director of the Provincial Office of the Service Industry, and Mr. Dun Linjun, deputy director of the Provincial Bureau of Commodity Prices, to give briefings on the current economic and social development and to answer journalists` questions. Next, Mr. Zhu Zhiming will give a briefing on the province`s economic and social development since the beginning of this year.

Zhu Zhiming: Good morning, friends from the press, ladies and gentlemen. In the following, I will first brief you on the general economic operation in the first five months this year.

Zhu Zhiming:1. The general economic operation in the first five months this year can be summarized in the following four characteristics:

Zhu Zhiming:First, the developmental level of the production industry continued to increase. (1) Agriculture increased smoothly and summer grain crops again gained a bumper harvest. Wheat production is expected to total 20.79 million tons, an increase of 4.2%. (2) Industrial production grew steadily. From January to May, above-scale firms realized an added value of 638.7 billion yuan, an increase of 18.6 percent, which is 2.3 percentage points above the national average level. (3) The service industry maintained rapid growth. The added value of the service industry is expected to increase by 15 percent in the first half of this year.

Zhu Zhiming:Second, the demand maintained a good tendency to increase. (1) The increase rate of investment became higher and higher by the month, and the structure continued to be optimized.  From January to May, the above-scale firms completed an investment of 469.05 billion yuan, an increase of 21.3 percent, and the increase rate is 2.2 percentage points above the first quarter. (2) Consumer demand remained strong. From January to May, the retail amount of social consumer goods realized 410.05 billion yuan, an increase of 23.4 percent, which is the highest increase since 1996. (3) Foreign economy and trade maintained a good momentum of development. The amount of imports and exports totaled 60.89 billion U.S. dollars, an increase of 37.1 percent.

Zhu Zhiming:Third, the quality of economic development improved continuously. From January to May, the local finances realized a revenue of 85.05 billion yuan, an increase of 24 percent. The tax revenues accounted for 79.5 percent of the local financial revenue, a 3.6 percentage points increase as against last year.

Zhu Zhiming:Fourth, the construction of people`s livelihood made new achievements. Employment continued to expand. From January to May, the number of people newly employed increased by 658,000 in towns and cities, and 846,000 rural workers were transferred, an increase of 3.1 percent and 1.1 percent respectively as against the same period last year. "zero employment families" were dynamically eliminated.

Zhu Zhiming:In general, although our province has been confronted with many complex international and domestic factors since the beginning of this year, the steady and rapid economic development has not changed, and the national economy is moving in the direction expected by the macro-control. The preliminary estimate of our province`s GDP growth in the first half of this year is about 14%.

Zhu Zhiming:2. The contradictions and problems worth attention in the economic operation

Zhu Zhiming:It should be noted that there are still some serious contradictions and problems in our province`s economic development, which needs a high degree of attention. First, inflation pressure is very great. From January to May, the accumulative total of the consumer price increased by 7 percent in our province. The prices in the production sector and of agricultural materials increased substantially. From January to May, the purchasing prices of raw materials, fuels and power rose by 13.6 percent, and the factory prices of industrial products rose by 9.2 percent. The prices of agricultural materials soared month by month, reaching 20.9 percent in May. The accumulative increase of the price was 16.7 percent from January to May. The excessive price rise has a great influence on the living of urban and rural residents and on enterprises` production.
Zhu Zhiming:Second, there is a great difficulty in ensuring the supply of coal, electricity, oil and transport. There has already been a short supply of coal, electricity, oil and transport since mid-April in our province.

Zhu Zhiming:Third, enterprises have difficulties in raising funds. At present the bank deposit reserve ratio has reached 17.5 percent, and funds available from the bank are greatly reduced. By the end of May, the financial institutions had an actual balance of deposit which was 56 billion yuan less than the loan.

Fourth, the rise in cost caused the profit of enterprises to decrease. From January to April, deficit enterprises in our province lost 7.84 billion yuan, an increase of 153 percent. The profit and tax that the petroleum processing and coking industry realized decreased by 54.9 percent, and the profit and tax that the thermal and electrical production and supply industry realized decreased by 39.2 percent.

Zhu Zhiming:Fifth, the employment and re-employment situation is rather severe. There is a labor shortage of 500 thousand.

Zhu Zhiming:We will conscientiously study these problems in our future work and strive to resolve them.

Zhu Zhiming:Thank you!

Liu Baoju: Today`s press conference is over. Thank you!