China Radio International: 

Statistical indexes of export, investment and industry have gone down. Does this mean growth potential will slow down, while pressure on growth will increase? 

Xing Zhihong:

I have introduced the statistics from the first quarter to you. The operation of the economy is stable. The "slowdown" was probably caused by some indexes' fluctuation in March, which was mainly caused by factors related to the Spring Festival. It is the most important traditional festival in China. Although the statutory holiday is seven days, its influence lasts much longer than that. The Spring Festival fell in the second half of February this year, which was later than usual. March 2 was the Lantern Festival. So the festival's late arrival had obvious influence on production. In our research and investigation, some export enterprises said they would try their best to export before the festival, and increase imports first after the festival with export gradually speeding up. The trade statistics in March showed clear Spring Festival influence. Also, the number of working days in March this year was one day fewer than last year. The two factors overlapped, causing some of the indexes' fluctuations in March. But beyond seasonal factors, we've found that the trend characteristics of the market and the increase of production have remained unchanged. 

As for China's economic development trend in the next stage, it is fair to say that the favorable conditions and factors supporting high quality growth are increasing. China's economy will continue to keep a development trend that features stabilizing growth. As for the supply side, the real economy's vitality is increasing, the quality and efficiency of the supply-side system are improving and the foundation for future growth is becoming more solid. 

The situation of agricultural production is comparatively good, with the implementation of a rural rejuvenation strategy and the deepening of agricultural supply-side structural reform. The improvement of agricultural products and the rise of green agriculture have prompted the adjustment of the crop-husbandry structure, further enhancing the comprehensive benefits and competency of agriculture. The growth trend of industry is stable. The industry grew at 6.8 percent in the first quarter, up 0.6 percentage points from the fourth quarter last year. Among the 41 major industries, 37 (90 percent) saw growth, better than the last year. The industrial capacity utilization rate has increased. The advanced manufacturing industry plays an increasingly important role as a driver for the growth of the whole industry. The service industry has maintained stable and comparatively fast development momentum. The production index of the service sectors remained above 8 percent in the first quarter, reaching 8.3 percent in March, 0.3 percentage points higher than January and February and the highest over the past six months. The emerging service sectors, with the internet as a representative, have grown robustly. The development of service industries, especially those related to people's livelihoods, has sped up.

On the demand side, consumption's foundation role is strengthening. And investment's key role in promoting the optimization of supply-side structure has become increasingly outstanding. Currently, foreign and domestic demands both exert powers, pushing supply-demand relations to develop in the direction of dynamic balance and positive cycle.

On the consumption side, the momentum of final consumption's growth is stable. The upgrading of residents' consumption structure has accelerated. The growth momentum of the upgrade-type of commodities is stable. The merging of online and offline consumptions has been expedited. Not only was online retail growing fast, but also traditional commerce, for instance, department stores', supermarkets' and exclusive shop's growth in the first quarter was faster than the same period of last year, reflecting retail's new positive influence in all consumption fields. 

The consumption in the service industry is growing robustly. The box revenue grew 39.8 percent in the first quarter. The investment structure is optimizing. The most important change is that civil investment is showing stronger vitality, accounting for more than 60 percent of the total investment. The civil investment grew by 8.9 percent in the first quarter, 2.9 percentage points higher than last year. Meanwhile, the fields of civil investment have expanded further, with some key fields strengthened, which has cast positive influence on supply-side structural optimization and the enhancement of supply-side efficiency.

As for projections, the deepening of reform and opening-up, the growth of driving force generated from innovation and the release of the bonus of a series of policies will consolidate the market players' anticipation and confidence in the future. The growth of the purchasing manager index (PMI) of the manufacturing sped up in March and had expanded for 20 months consecutively. Particularly, the PMI of large-, medium- and small-sized manufacturing enterprises all expanded in March. The non-manufacturing commercial activity index has remained at 54 percent, a positive sign, for seven months continuously. The consumer confidence index reached 122.3, a comparatively high level given its history. So judging from the three aspects of supply, demand and projection, internally generated driving force is becoming stronger. This is the most important support for the sustainable and healthy development of the Chinese economy. Thank you.

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