China's economy has taken a beating as the global economic slowdown has led to a cooling of Chinese exports.

The growth rate was in line with expectations as government statisticians had previously said the economy would grow by about eight percent in the first half of the year.

"In the first half of the year, every area and every government department ... worked hard to overcome problems from the international economy and from serious droughts in some areas at home," said Ye.

In the second quarter of this year, China's GDP grew by 7.8 percent, a slightly slower rate than the first-quarter growth of 8.1 percent.

The bureau said the domestic consumption market was moderately brisk, growing by 10.3 percent in the first six months of the year.

However, consumers were much more willing to spend in the cities where consumption growth was 11.6 percent compared with just 8.1 percent in the countryside.

In an indication that China still has problems with triggering domestic economic activity, consumer prices were up by just 1.1 percent in the first half.

Ye warned that the economy may face more serious challenges in the rest of the year because of the continued weak global economic outlook.

Still he struck an upbeat note, saying that the economy may meet or even exceed its seven percent target for economic growth for all of 2001 set at the beginning of the year.

(Agencies 07/17/2001)