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nominal GDP grew by around 19%. The corresponding growth
rate of light industrial output was even faster, at over
25%. There was thus no overall shortage of consumer goods,
was there any sign of panic buying during the year.
This was in stark contrast to the situation in 1988 when
nor
consumers in China
scrambled for whatever commodities
available at department stores and other retail outlets.
8.
was
infrastructure.
To a large extent the supply and demand imbalance related to capital construction, owing to a substantial expansion in fixed asset investment, particularly in
property and
This was evidenced by the
very rapid growth in fixed asset expenditure, by 23.8% in
1991 and 38.0% in 1992, both in money terms. These were even higher than the corresponding growth rates of 20.6% and 23.5% recorded in 1987 and 1988 (5). Because of the
upsurge in building and construction activities, some of
the major construction materials such as steel bars and
bricks were reportedly in acute shortage in China, and
occurred during the course of
significant price increases
1992.
9.
Whether an excess
aggregate demand relative to
supply will be translated into a sharp escalation in prices
depends also
prevailing.
have grown
currency in
on the monetary and credit conditions
In 1992, bank loans in China were estimated to
by about 20%, and the money supply (in terms of
circulation) by about 30%. The growth rate of
(5)
1986
1987
1988
1989
1990
1991
1992
Growth rate in money terms of fixed asset investment in China
(%)
18.7
20.6
23.5
-8.0
7.5
23.8
38.0
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