China Watch Blog

China Watch Blog has learnt that orders to US factories for big-ticket manufactured goods dipped in June as demand for commercial aircraft fell. But businesses increased spending on capital goods for a second straight month, a sign that manufacturing continues to help keep the economic recovery afloat.

A report in the SCMP’s Business Post stated that demand for durable goods fell 1% last month to a seasonally adjusted US$190.5 billion, the Commerce Department said.

It was the second straight monthly decline and  the largest drop since August last year. Orders for commercial aircraft fell 25.6%, although seasonal adjustments kept the report from reflecting a strong month for Boeing.

Without the volatile transportation sector, orders fell by 0.6 percentage points.  Still, business spending for machinery and equipment edged up 0.6 percentage points, AP reported.

China Watch Blog has picked up news that most provinces and regions in China reported first-half gross domestic product (GDP) growth exceeding the national level, with less-developed central and western regions generally outperforming the nation’s more economically advanced areas.

The People’s Daily report stated that however,  this was evidence that the country is still on the old investment-driven track and needs to make greater efforts to fulfill economic restructuring, citing experts.

As of July 25, more than 20 provinces, municipalities and autonomous regions had published their GDP growth figures for the first half, all of which were above the national level of 11.1%.

Analysts suggested that government unify provincial and central GDP calculation methods as soon as possible and that local officials’ performance should no longer be judged by local GDP growth in order to resolve statistical inaccuracies.

Tianjin led the list with a GDP growth rate of 18% in the first half, and Chongqing ranked second. The booming southwestern metropolis was also the first among western regions, with a record-breaking economic growth of 17.6%.

Shaanxi province in northwestern China jumped to third place from the bottom of last year’s list with a growth rate of 17.5%.

Ningxia Hui autonomous region ranked fourth on the national list with GDP growing by 17.1%, and the figures for Inner Mongolia autonomous region and Sichuan province were expected to be above 16%. Hubei and Hunan provinces both reported economic growth rate of more than 15%, and Jiangxi achieved 14.4% growth, the highest in the same period since 1995.

The outstanding performance of less-developed central and western areas in the first half of 2010 contrasts sharply with the country’s more advanced regions, where there are signs of a slowdown

Guangdong province estimated a GDP growth rate of 12.7% while Zhejiang reported 13%, 2 percentage points lower than the first quarter. The growth rate in Jiangsu province slowed by 0.9 percentage points compared with the first quarter to 14.5%, and Beijing ranked at the bottom with 12% increase rate.

Sheng Laiyun, spokesman of National Bureau of Statistics, said earlier that the growth rate of fixed asset investment and industrial output in central and western areas in the first half was faster than in the east.

“The rapid growth in these regions reflected conflicts between economic recovery led by government-dominant investment and heavy industries, and necessary economic restructuring,” said Wang Jun, an analyst with the China Center for International Economic Exchanges.