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China's economy faces 5 dilemmas for its sustained rise.
China's economy which grew at a rate of 9.5 percent for the first three months of the year faces 5 dilemmas for its sustained rise.

The severe draught in some parts of south China and southwest China this spring and the soaring production materials for agriculture combine to add difficulty in summer harvest and increase in farmers' income.

Zheng Jingping, spokesman with the National Bureau of Statistics proposed more direct subsidies to farmers to offset losses caused by price hike on one hand and safeguard the rural market order on the other.

The 22.8 percent surge of the fixed assets investment on the base of the 43 percent rise last year remains a source of concern. Experts warn against the spending spree on real estate, urban construction, power plants and local mega-projects.

Zheng vowed to keep land and credit under close surveillance. He also reiterated that prudent fiscal policy has taken the place of the proactive one this year.

The CPI which notched up 2.8 percent for the first quarter seems relaxing but still calls for special attention for its future tendency.

Upstream products were priced more than 10 percent higher in the first three months, which in turn would very likely push prices of home appliances up. Oil prices on the world market are still vibrating at a high level. And there are signs indicating inflated utility bills.

However, Zheng saw bright sides, especially grain and food prices which are expected to be stable this year, as well as supplies of downstream products which exceed demand.

Energy supply and transportation availability still lagged behind the demand. The serious shortfall of coal supply has caused production beyond the full capacity, which has in turn cost lives of miners.

Experts suggest more supply on the condition of guaranteed safe production, faster development of infrastructure and economic efforts on balanced supply and demand.

Finally, sectors with heavy pollution and energy consumption were continuing to gear up their production and exports from Jan. to Mar. As a result, the GDP per unit costs more, instead of less, energy.

All of these, experts urged, means the upgrading of industrial structure is a pressing task right now so that energy and resources can be saved as efficiently as possible.

The National Bureau of Statistic released figures for the economic operation in China for the first quarter on April 20.