BEIJING, Jan 22 (Reuters) - China's annual GDP growth slowed to 6.8 percent in the fourth quarter from 9.0 percent in the third quarter as the full force of the global financial crisis struck home.
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Following are the highlights of a news conference on the economic situation by Ma Jiantang, commissioner of the National Bureau of Statistics.
Detailed data:
-- Dec industry output up 5.7 pct y/y, vs forecast 4.6 pct
-- Dec retail sales up 19.0 pct y/y, vs forecast 19.6 pct
-- Dec CPI up 1.2 pct yr/yr, vs forecast 1.7 pct
-- Government CPI target for 2009 is 4.0 pct
-- Energy consumption per unit of GDP down 4.2 pct in '08, vs 3.7 pct in '07 and 1.8 pct in '06
-- Real per-capita urban income growth 8.4 pct; real rural income growth 8.0 pct [nPEK362156]
(* denotes new material)
* CONFIDENT OF 8 PCT GROWTH
"As long as we can boost domestic demand and increase investment, we can absolutely achieve the 8 percent GDP growth target in 2009."
* LATEST FIGURES ENCOURAGING
"In December, the economy was hit quite hard by the global financial crisis, but the December figures also began to reveal some positive changes and these changes are very important for us."
He noted the rebound in money supply and lending growth in December, saying that showed monetary policy was producing positive results.
Retail sales grew 17.4 percent from a year earlier in inflation-adjusted terms in December, up from 16.6 percent in November.
"We have seen a rebound in the sales of certain goods, including cars, garments and cosmetics."
He also said there were encouraging signs on the investment side, with some pick-up in investor confidence.
Export growth of goods that are eligible for export tax refunds was positive in December, compared with negative growth overall.
"Our export policies are beginning to show results.
"Are these positive changes just temporary, or do they signal a trend that is sustainable? We still need to wait and see. But they are like sunshine in a cold winter, light at the break of a dark dawn, and sparks that can turn into a roaring fire."
* CHINA STILL POOR
"We are a huge country and it is natural that as we continue to grow, our economy will grow very large. But I want to stress that we also have a population of 1.3 billion people and divided among this many people the per capita income per year is still less than 20,000 yuan ($2,924). We are still a developing country."
"I used to work in Qinghai province, where many nomads don't even have a fixed address."
FACTORY CLOSURES LIMITED
"China has not had a huge number of factory closures. Those that have closed only account for a small portion. "Quite a few migrant workers have returned home. This is partly due to the impact of the global financial crisis but is also because of the long-standing tradition of returning home to spend the Spring Festival with one's family."
He said that according to surveys, about 25 percent of all migrants have returned home. Of those, only 20 percent had returned home because their factories had closed, and 80 percent said they would return to cities to seek jobs.
"This demonstrates their confidence in China's economy."
CONFIDENT ABOUT FUTURE
"The fourth quarter did present some grave challenges and difficulties, but they are temporary. Just like the freezing weather we had this morning, it will not last forever.
"I can responsibly tell you friends that I am confident about China's economy in 2009 and in the future. Where does our confidence come from? The overall performance of China's economy, which is steady and fast, has not changed. The unexpected international financial crisis will not change this.
"A downturn can be a very good time for restructuring the economy.
"The deep-rooted and underlying fundamentals that drive China's growth remain unchanged.
"Since reform and opening-up, the major force driving up China's fast economic growth has been people's strong desire to enjoy a better life during the process of urbanisation and industrialisation.
"Has the economic crisis changed such a basic demand? No."
"The supply side is also very strong.
"The industrial system is relatively complete, China has 700-800 million labourers and over 20 trillion yuan in household savings, and infrastructure is being improved quickly."
"My confidence in China's economy in 2009 and beyond also comes from my confidence in our country's macroeconomic policy. The central leadership has taken prompt and forceful measures.
"With the implementation of all these measures, China will work its way out of the current difficulties.
"We already saw some positive changes in December."
NEED TO IMPROVE STATISTICS
"We have to gradually improve China's statistics system. We rely mainly on year-on-year growth figures and we would gradually like to introduce quarter-on-quarter growth figures."
INCOME GROWTH & CONSUMPTION
"I believe people are buying houses, cars and even some expensive consumer goods not only with their current incomes but mainly with their past savings.
"Retail sales also include consumption by organisations, not just individuals. So there is not necessarily a one-to-one relationship between current income growth and retail sales growth."
PROMOTING CONSUMPTION
"You asked whether robust consumption can be sustained. My answer is that it can be.
"By continuously improving people's incomes, improving the consumption environment, expanding the scope for consumption and addressing people's worries about spending by improving social services, I believe that China's consumption will be able to maintain relatively rapid growth."
BETTER GEOGRAPHICAL BALANCE
"Growth in industrial output and investment was faster in the central and western regions than in the eastern part, which means that we were able to balance regional growth while conquering all the economic difficulties.
"We continued to make progress in improving people's living standards."
MONETARY & FISCAL POLICY
"The central leadership made timely adjustments to monetary policy."
China has also adopted a proactive fiscal policy, he said. These moves were intended both to help the economy at this difficult time and to restructure it in the long term.
"Thanks to these scientific, forceful and timely measures, we have been able to see a relatively fast economic growth, moderating prices, improved economic structure and better living conditions for the people in 2008 despite the extremely stern and complicated environment."
CONTRIBUTING TO GLOBAL GROWTH
Growth of 9 percent is actually quite high, Ma noted.
"In maintaining 9 percent growth, China contributed more than 20 percent to global growth."
INFLATION FIGHT
"In order to curb inflation, China took a slew of measures to increase supply, adjust demand, facilitate retail sales of goods and increase the subsidies for low-income people.
"Thanks to effective policy measures, we saw a fast dip in inflation growth. Inflation fell from 8.7 percent to below 5 percent within half a year."
"Given the current situation, this will help us adopt more macro policy measures."
ON FINANCIAL CRISIS:
"2008 was an eventful and extraordinary year, with natural disasters, a spreading international financial crisis and plummeting prices for primary products. The central leadership, facing these challenges, have taken a forward-looking, hard-headed approach.
"The biggest challenge was the spreading of the global financial crisis and its impact on domestic growth. Starting after October, it spread from SMEs to larger companies, from export sectors to other sectors and from the coast to the rest of the country."
FUTURE POLICIES:
"The international financial crisis is deepening and spreading with continuing negative impacts on the domestic economy."
He said China would effectively implement measures to promote growth, spur domestic demand, restructure the economy and improve people's livelihoods.
He stressed the need to promote steady and rapid economic growth in order to maintain a "harmonious and stable social climate". (Reporting by Simon Rabinovitch, Zhou Xin and Langi Chiang; Editing by Jason Subler)