Power generation and consumption is a leading economic indicator, a wind vane for future economic trends. A February bounce in power generation that continued in the first half of March was welcomed by economic policy makers, not least Premier Wen Jiabao, as a sign of recovery. It was, perhaps, a false hope as power generation again declined in late March. China Electricity Regulatory Commission officials predict a 4% decline in power generation in April.
Meanwhile, with yet more negative information released yesterday, the A-share market today decline steeply. The Shanghai Composite Index closed at 2461.35 points, down 2.94%, and the Shenzhen Component Index closed down 4.06%, at 9249.08 points,
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Nationwide first quarter tax revenue totaled 1.302 trillion yuan, a fall of 10.3%, year on year. Consumption tax maintained rapid growth of 38.5%, year on year, in the first quarter, but other major taxes all declined. Domestic VAT, import linkage tax, corporate income tax, and personal income tax dropped by 2.4%, 15.8%, 16.7%, and 0.3%, respectively.
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According to Vice-Minister Lou Qinjian of Industry and Information Technology, important industries such as cars and steel face serious production surpluses and 9 among the 12 key industries are seeing year-on-year profit decreases.
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Rumor has it that the National Development and Reform Commission released an urgent notice on April 15, after an executive meeting of the State Council, requiring local governments to submit a third batch of qualified projects for central government investment as soon as possible. Projects funds are expected to be allocated in the first half of May at the earliest.
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According to statistics from the State Grid, power generation dropped 0.7% year on year in March, after a rise of 5.9% in February and a fall of 12.3% in January. Experts believe the fallback indicates economic uncertainties. State Grid figures also show that power generation in the first quarter of this year dropped 2.25%, year on year.
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