He told a press conference that China's employment improved over the first half of the year. But he said unemployment remainedrelatively high.

NBS statistics showed that the registered number of unemployed persons in urban areas was 7 million by the end of June, about equal to the number at the beginning of the year. He said the unemployment rate in urban areas remained below 4 percent in the period.

The large number of laid-off workers and unemployed persons in urban areas is one of the problems to be addressed in the current economic situation, Qiu said.

Statistics showed that the disposable income of urban residentsgrows to an average of 3,942 yuan (477 US dollars), increasing 17.5 percent over the corresponding period of last year. The growth rate was substantially higher than the 5.5-percent growth during the same period of last year.

Qiu attributed the fast growth of the income of urban residentsto the pay hikes of government employees since last year and the government's efforts to fully and punctually pay subsidies to laid-off workers and pensions to retired workers.

No deflation in China now

The consecutively falling consumerprice index in past months did not mean Chinese economy was in deflation, Deputy Director of National Bureau of Statistics (NBS) Qiu Xiaohua said Monday.

Statistics showed that Chinese general consumer price dropped 0.8 percent on a yearly basis for the first half of 2002.

Qiu said the declining consumer price index benefited consumersbut hurt enterprises earning.

But it's still normal if the decrease rate was limited within 1 percent, Qiu said.

Qiu contributed four factors to the momentum. The first is thatChina's accession to the World Trade Organization (WTO) facilitated the flowing in of foreign products with lower prices than domestic commodities, which squeezed domestic market price.

The improvement in Chinese market competition mechanism helped crashing down monopoly and held markups based on monopolizing advantages, he said.

The fast progress in science and technology also contributed tothe lowing of products price, Qiu added.

The fourth reason was the government-initialized campaign of modifying and standardizing market orders banned casual and illegal price-rising, Qiu said.

He said the drop rate is a result jointly caused by the four reasons, not meaning Chinese economy is in deflation now and the falling was witnessing a turning back trend.

Qiu predicted the drop rate for the next half of this year would be within 1 percent.

(People's Daily July 16, 2002)