GF 323
CONFIDENTIAL #2
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of 9.8% in real terms. By comparison, light industrial output grew at a much faster rate of 20.1%. Thus, quite
unlike the last consumer boom in 1987-88, there was no
overall shortage of consumer goods against demand.
8.
On the monetary side, residents' deposits totalled Rmb 1,154.5 billion at the end of 1992, 26.8% higher than a year earlier (11).
Concerns were expressed that the enormous accumulated spending power as represented by the deposits could constitute a significant potential source of inflationary pressures. A massive movement of these funds could also be de-stabilising and damaging, in view of the
fact that the asset markets in China were still at an
initial stage of development. reportedly examining
examining ways in be channelled, including
financial assets.
best
The Chinese government was
which the idle money could
investment in physical and
9.
On China's
inflation, the General Retail Price
Index (12) rose by 6.4% in the fourth quarter of 1992,
a
further up from 4.6% in the third quarter. For the year as
whole, the overall inflation rate was 5.4%, which was
nevertheless still lower than the earlier official
projection of 6%.
the
by
Inflation was, however, much higher in where the Cost of Living Index (13) rose an average of 10.9%. This was not unexpected, as many
major cities,
(11)
The growth
(12)
(13)
rates of residents' deposits recorded during the four quarters of 1992 were 9.3%, 4.9%, 3.9% and 6.4% respectively.
The General Retail Price Index is computed as a weighted average of the retail prices of consumer goods and agricultural products, but excluding the prices of services.
The Cost of Living Index measures the price movements of all goods and services consumed by staff and workers in 35 major cities in China. It is roughly comparable to the Consumer Price Index in Hong Kong.
CONFIDENTIAL
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