One. The overall economic situation
　　
　　1. The country generated RMB261.7 billion yuan in industrial added value in May 2002, 12.7% over the figure for May 2001. This was the greatest monthly growth recorded since 1998, and was 0.8 percentage points greater than the growth achieved in April. The aggregate total was RMB1,168 billion yuan for the January-May industrial added value, an increase of 11.6% year-on-year.
　　2. The country‘s retail-sales volume for May 2002 came to RMB320.21 billion yuan, up 9.3% year-on-year. The figure breaks into RMB204.97 billion yuan for urban retailing and RMB115.24 billion yuan for rural retailing, up 10.8% and 6.8% over the previous month, respectively. Meanwhile, deflation continued, with prices dropping from the April level.
　　3. China‘s foreign trade for May 2002 was computed at URS47.08 billion in value, up 18.8% over May 2001. The figure breaks down into US$24.64 billion for exports, up 18.4% year-on-year, and US$22.44 billion for imports, up 19.3%, suggesting a trade surplus of US$2.2 billion. The combined volume of imports and exports came to US$221.55 billion for the first five months of 2002, 12.1% greater than for the corresponding period of 2001. The figure breaks down into US$115.99 billion for exports, up 13.2%, and US$105.56 billion for imports, up 10.9%, with a balance of US$10.43 billion in favor of exports.
　　Foreign investments of US$16.922 billion were realized in the first five months of 2002, 12.38% greater than the figure for the corresponding period of the previous year.
　　
　　Two.Performances of the domestic financial market
　　
　　1. The balance of M2 (broad money supply) was computed at RMB16.6 trillion yuan at the end of May 2002, 14% greater than a year ago. The corresponding figure for M1 (narrow money supply) came to RMB6.12 trillion yuan, up 14.5%. The fluidity of cash in circulation, that is, M1 divided by M2, stood at 36.9% at the end of May 2002. That was 0.8 percentage points higher than a year ago, meaning that money circulation in China was faster than during the same period of 2001.
　　The balance of all bank deposits was computed at RMB11.83 trillion yuan, representing an increase of 11.4% year-on-year, which was greater than the rate of increase in loans extended during the same period.
　　2. The rate of exchange for Renminbi stood at 8.2677 yuan against the U.S. dollar at the end of May 2002, suggesting that the Chinese currency remained stable.
　　The interests were basically stable in the first five months of 2002, the weighted rates being 2.119% for inter-bank transactions and 1.9517% for buy-back transactions, which dropped by 1.9% and 0.05% from the April level, respectively.
　　1 Zhang Shuguang is research fellow of the Economics Institute of the Chinese Academy of Social Sciences and director of the Beijing Zetian Economics Institute.
　　2 Wang Xinbo is a guest research fellow of the Beijing Zetian Economics Institute.