Economy

Information Consumption Drives Domestic Economic Growth

Chinas businesses above designated size chalked up in the first quarter online retail sales amounting to US $81.5 billion – a 51.7 percent increase， compared to 12 percent growth in total sales of retail consumer goods， according to National Bureau of Statistics data. Sales by the countrys key retailers of communications equipment also saw rapid growth， at a year-on-year rate of 0.8 percentage points. Sales of 3G mobile phones， meanwhile， grew by 27 percent， according to the Ministry of Commerce. In addition to information products， there was also significant growth in information content. The overwhelming popularity of smartphones has brought about a proliferation of online music， video， and game apps for cell phones.

Information consumption volume soared in the first quarter to RMB 691 billion， an increase of 22.3 percent. Moreover， the 2013 transaction value of Chinas online retail market rose to RMB 1.8851 trillion， a year-onyear increase of 42.8 percent， accounting for 8.04 percent of Chinas total retail sales of consumer goods， according to the China E-business Research Center. China has consequently now surpassed the U.S. to become the worlds largest online retail market.

Total Assets of Chinas Central Bank World Top for Third Straight Year

The recently published balance sheet of monetary authorities of the Peoples Bank of China （PBOC）， the countrys central bank， shows that， as at the end of 2013， the banks total assets were RMB 31.727855 trillion （about US $5 trillion）， higher than that of the central banks of the U.S.， Europe and Japan. In fact， the asset volume of Chinas central bank has topped that of the central bank of any other country in the world since the end of 2011.

The balance sheet shows that foreign exchange reserves constitute PBOCs major asset. As of March， 2014， Chinas foreign exchange reserves had swelled to US $3.95 trillion， accounting for around 80 percent of the central banks total assets. Associate research fellow at the China Center for International Economic Exchanges Zhang Monan， however， holds that

Service Trade Maintains Momentum

these relatively high foreign exchange reserves hamper leeway in Chinas monetary policy.

But high foreign exchange reserves signify the development of an emerging economy. Chief economist at the Industrial Bank Lu Zhengwei holds that the big trade surplus an emerging economy accumulates in the course of its rapid growth is bound to expand that countrys foreign currency reserves.

Chinas service trade volume surged in the first quarter to US $138.8 billion， a 15.6 percent year-on-year growth that expanded the sectors share in Chinas total foreign trade to 12.8 percent – 1.6 percentage points higher than the same period last year.

Director of the Department of Trade in Services and Commercial Services under the Ministry of Commerce Zhou Liujun attributes this upbeat momentum to the synergistic effect of domestic and overseas demands. On the international front， the economies of developed countries， notably Chinas main trading partners the United States， EU and Japan， have taken a turn for the better， which is a shot in the arm for Chinas service trade. Domestically， the service industry added value– since first surpassing that of the manufacturing sector in 2013 to become Chinas biggest industry – maintained its momentum of relatively rapid growth in the first quarter by contributing 49 percent to GDP. Meanwhile， foreign investment in the service sector has also sustained rapid growth， with actually used foreign capital reaching US$17.39 billion， a 20.6 percent increase， and 6.9 percentage points higher than the same period last year. Zhou predicts for Chinas service trade a golden age of development.

RMB 220 Billion Investment Imminent in Chinas Urban Rail Transit

The number of Chinese cities that have been approved to build rail transits now stands at 36， according to the National Development and Reform Commission. Chinas investment in this field is expected to reach RMB 220 billion in 2014 – RMB 40 billion more than last year. By the end of 2013， 19 Chinese cities had built subways totaling 2，366 km in length. By 2020， 50 Chinese cities will operate rail transits that add up to a total length of around 6，000 km， at a total investment of RMB 4 trillion.

Rail transit covers subway， light rail， and tramcar transportation. This year， rail transit projects will start in such Chinese cities as Lanzhou， Urumqi， Changchun， Chongqing， Taiyuan， and Zhengzhou.

The State Council recently decided to delegate more items formerly requiring administrative approval to local governments. Accordingly， urban rail transit construction projects are now subject to the examination of provincial authorities as per state-approved plans. This has motivated certain third-tier cities to take the initiative in building rail transits. Experts warn， however， that before over-zealously engaging in rail transit construction， these cities should pay heed to and guard against financing risks.