Shou Xiaoli:

Ladies and gentlemen, good morning. Welcome to this press conference. Today, we will release China's economic data. 

Mr. Mao Shengyong, the director general of the Department of Comprehensive Statistics at the National Bureau of Statistics (NBS) and spokesperson of the NBS, will present China's economic performance in the first quarter of 2019, and answer some of your questions. 

At this time, I'll give the floor to Mr. Mao.

Mao Shengyong:

Thank you. Ladies, gentlemen, friends from the media, good morning. In accordance with the usual practice, I will introduce the basic situation of the economic operation in the first quarter to you, and then answer your questions. 

In the first quarter, the national economy enjoyed stable performance with growing positive factors.

In the first quarter of 2019, under the strong leadership of the CPC Central Committee with Comrade Xi Jinping as its core, all regions and departments implemented the decisions and arrangements made by the CPC Central Committee. The State Council, adhered to the general working guidelines of making progress while maintaining stability, and fully implemented the new development philosophy. It also conformed to the requirements of high quality development, made solid efforts to advance the supply-side structural reform, strengthened the counter-cyclical adjustment, and spared no effort to put the policies into effect. As a result, the national economy enjoyed stable performance with growing positive factors. There is also stronger market expectation and confidence, which will sustain the momentum of progress in overall economic stability.

According to preliminary estimates, the gross domestic product (GDP) of China was 21.34 trillion yuan in the first quarter, an increase of 6.4% at comparable prices year-on-year. This figure is the same as that of the fourth quarter last year, 0.4 percentage point lower than that of the same period last year and 0.2 percentage point lower than that of 2018. The value added of the primary industry was 876.9 billion yuan, up by 2.7% year-on-year; for the secondary industry it was 8.23 trillion yuan, up by 6.1%; and for the tertiary industry it was 12.23 trillion yuan, up by 7.0%.

1. The agricultural sector posted a stable performance with an improved planting structure. 

In the first quarter, the added value of the agricultural sector (crop farming) posted a year-over-year increase of 4.4 percent. The output of poultry, eggs and milk increased by 2.3 and 2.0 percent year-over-year, respectively; the combined output of pork, beef, mutton and poultry was 22.52 million tons, down 2.8 percent year-over-year. Broken down, the output of pork was 14.63 million tons, down 5.2 percent; but the output of beef, mutton and poultry were up by 1.7,1.4 and 2.1 percent, respectively. In March, the spring ploughing and sowing have proceeded smoothly in most major farming areas, due to favorable sunshine and soil moisture conditions, as well as good light and temperatures. The planting area intended for soybeans increased by 16.4 percent year-over-year, and the area for quality middle-season rice and single-cropping late rice grew by 1.9 percent.

2. The growth of industrial production accelerated and the proportion of high-tech industries rose. 

The growth of the total value added of industrial enterprises above the designated size was 6.5% year-over-year in the first quarter of 2019, or 1.2 percentage points higher than in the first two months, and 0.8 percentage point higher than in the fourth quarter of last year, also 0.3 percentage point lower than the same period last year. Analysis by types of ownership showed that the value added of state holding enterprises is up by 4.5%; that of share-holding enterprises is up by 7.8%; and that of enterprises funded by foreign investors or investors from Hong Kong, Macao and Taiwan is up by 1.4%. In terms of sectors, the value added of the mining industry grew by 2.2% year-over-year, manufacturing increased by 7.2%, and the production and supply of electricity, thermal power, gas and water increased by 7.1%. The  value added of high-tech industries grew by 7.8% year-over-year, or 1.3 percentage points higher than that of industrial enterprises above the designated size, accounting for 13.5% of all industrial enterprises above the designated size, 0.8 percentage point higher than in the same period last year. The value added of strategic emerging industries grew by 6.7% year-over-year, or 0.2 percentage point higher than that of the industrial enterprises above the designated size. New products registered fast growth, with the output of devices for mobile communication base stations, urban rail vehicles, new energy automobiles and solar cells growing by 153.7%, 54.1%, 48.2% and 18.2% respectively in the first quarter. In March, the total value added of industrial enterprises above the designated size was up by 8.5% year-over-year, 3.2 percentage points higher than that of the first two months, or up by 1.0% month-over-month.

In the first two months, the profits made by industrial enterprises above the designated size stood at 708.0 billion yuan, down by 14.0% year-over-year, a slight decline compared with the same period last year after deducting the Spring Festival factor. The profit rate of business revenue of industrial enterprises above the designated size was 4.79%. Preliminary data shows that industrial enterprises improved realization of profits in March.

3. The service sector grew fast and the growth of major industries rebounded.

In the first quarter, the development of the tertiary industry witnessed progress while maintaining overall stability. Specifically, the added value of leasing and business services grew by 8.3% year-on-year; the financial industry increased by 7%; accommodation and catering services increased by 6%; and the wholesale and retail industry grew by 5.8%. All these growth rates were higher than the fourth quarter of last year. Information transmission, software and information technology services maintained rapid growth, up by 21.2% year-on-year.

In the first quarter of 2019, the national service industry production index increased by 7.4% year-on-year, 0.1 percentage point higher than that of January and February, and 0.2 percentage point higher than that of the fourth quarter of last year. In March, the national service industry production index was up by 7.6% year-on-year, 0.3 percentage point higher than that of January and February. In the first two months of the year, the business revenue of service enterprises above the designated size increased by 10.9% – 0.5 percentage point lower than that of last year.

4. Growth rate of market sales rose; share of online retail sales increased.

In the first quarter, the total retail sales of consumer goods totaled 9.78 trillion yuan, up by 8.3% year on year. This was a 0.1 percentage point higher than that of the first two months this year and 1.5 percentage points lower than that of the same period last year. The retail sales of consumer goods in urban and rural areas totaled 8.34 trillion yuan and 1.44 trillion yuan respectively, up by 8.2% and 9.2% year on year. Catering sales totaled 1.06 trillion yuan, up by 9.6% year on year. The retail sales of commodities totaled 8.71 trillion yuan, up by 8.2% year on year. The sales of cosmetics and communication equipment above the designated size grew by 10.9% and 10.0% respectively. This was 2.6 percentage points and 1.7 percentage points higher than that of total retail sales of consumer goods respectively. In March, the total retail sales of consumer goods increased by 8.7 percent year on year, 0.5 percentage point higher that of the first two months and 0.91 percentage point higher than that of February.

In the first quarter, online retail sales across China totaled 2.24 trillion yuan, up by 15.3% year on year. This was 1.7 percentage points higher than that of the first two months of this year. The online retail sales of physical commodities totaled 1.78 trillion yuan, up by 21% year on year. This accounted for 18.2% of the total retail sales of consumer goods and was 1.7 percentage points higher than that of the first two months of this year. 

5. Investment rebounded steadily and investments in high-tech industries grew rapidly.

In the first quarter of 2019, the investment in fixed assets (excluding rural households) was 10.19 trillion yuan. This marked a growth of 6.3% year-over-year. The growth rate was 0.2 percentage point higher than that of the first two months, or 1.2 percentage points lower than that of the same period last year. Specifically, private investment reached 6.15 trillion yuan, up by 6.4%. Investments in the primary industry grew by 3.0% and the secondary industry was by 4.2%. Among this, investments in manufacturing grew by 4.6%. The tertiary industry grew by 7.5%, of which the investment in infrastructure grew by 4.4%. Investments in high-tech manufacturing went up by 11.4% year-over-year, 5.1 percentage points higher than that of the total investment. Investments in high-tech services went up by 19.3% year-over-year, 13 percentage points higher than that of the total investment. In March, the investment in fixed assets (excluding rural households) grew by 0.45% than that in February. 

The total investment in real estate development in the first quarter was 2.38 trillion yuan, up by 11.8% year-over-year. The growth rate was 0.2 percentage point higher than that of the first two months, or 1.4 percentage points higher than that of the same period last year. The floor space of commercial buildings sold reached 298.29 million square meters, down by 0.9% year-over-year. The decrease was 2.7 percentage points lower than that of the first two months. The total sales of commercial buildings were 2.70 trillion yuan, up by 5.6%, and 2.8 percentage points higher than that of the first two months.

6. The growth of the total value of imports and exports accelerated and the trade structure continued to be optimized.

The total value of imports and exports in the first quarter was 7.01 trillion yuan, up by 3.7% year-on-year, 3 percentage points higher than that of the first two months. The total value of exports was 3.77 trillion yuan, up by 6.7% while the total value of imports was 3.24 trillion yuan, up by 0.3%. The trade balance was 529.7 billion yuan in surplus, up by 75.2% over that of the same period last year. The trade structure continued to be optimized. The value of general trade grew by 6 %, accounting for 59.6% of the total value of imports and exports, 1.3 percentage points higher than that of the same period last year. The export of electrical and mechanical products increased by 5.4%, accounting for 58.8% of the total value of exports. The total value of imports and exports by private enterprises went up by 9.9%, accounting for 40.6% of the total value of imports and exports, 2.3 percentage points higher than that of the same period last year. In March, the total value of imports and exports was 2.46 trillion yuan, up by 9.6% year-on-year, which was 8.9 percentage points higher than that of the first two months. To be specific, the total value of exports was 1.34 trillion yuan, up by 21.3% while the total value of imports was 1.12 trillion yuan, down by 1.8%. 

In the first quarter, the export delivery value of industrial enterprises above the designated size reached 2.77 trillion yuan, up by 4.8% year-on-year. In March, the export delivery value of industrial enterprises above the designated size stood at 1.03 trillion yuan, up by 5.7%.

7. Consumer prices rose slightly and producer prices for industrial products experienced modest growth.

In the first quarter, consumer prices went up by 1.8% year-on-year, 0.2 percentage point higher than that of the first two months, or 0.3 percentage point lower than that of the same period last year. To be more specific, prices went up by 1.9% in urban areas and up by 1.8% in rural areas. Grouped by commodity categories, prices for food, tobacco and liquor went up by 2.2%; clothing increased by 1.8%; housing went up by 2.1%; articles and services for daily use rose by 1.3%; transportation and communication went down by 0.8%; education, culture and recreation increased by 2.6%; medical services and health care went up by 2.7%; and other articles and services rose by 2.1%. In terms of food, tobacco and liquor prices, prices for grain went up by 0.5%, pork fell by 1.2%, and fresh vegetables rose by 6.9%. In March, consumer prices went up by 2.3% year-on-year, 0.8 percentage point higher than that of last month, or down by 0.4% month-on-month.

In the first quarter, producer prices for industrial products went up by 0.2% year on year, 0.1 percentage point higher than that of the first two months, or 3.5 percentage points lower than that of the same period last year. In March, the producer prices for industrial products went up by 0.4% year-on-year, 0.3 percentage point higher than that of February, or up by 0.1% month-on-month. In the first quarter of 2019, the purchasing prices for industrial producers were up by 0.1% year-on-year and in March, it was up by 0.2% year-on-year, the same as that of February.

8. The surveyed unemployment rate in urban areas dropped slightly and the number of rural migrant workers continued to increase.

In the first quarter of 2019, there were 3.24 million new jobs in cities and towns across the country. In March, the national surveyed unemployment rate in urban areas was 5.2%, 0.1 percentage point lower than that of February. To be specific, the surveyed unemployment rate of people aged from  25 to 59 was 4.8%, 0.4 percentage point lower than that in urban areas. The urban surveyed unemployment rate in 31 major cities was 5.1%, 0.1 percentage point higher than that of last month. The employees of enterprises worked an average of 46.0 hours per week, which was an increase of 1.1 hours from February. At the end of March, the number of rural migrant workers reached 1.77 billion, 2.10 million more than that of the same period last year. This figure was up by 1.2%, and marked a 0.1 percentage point increase year-over-year.

9. Resident income grew steadily and the income growth of rural residents outpaced that of urban residents. 

In the first quarter, the nationwide per capita disposable income of residents was 8,493 yuan, a nominal increase of 8.7% year-over-year. The actual increase of price factor was 6.8%, 0.2 percentage point higher than the same period last year. In terms of permanent residence, the per capita disposable income of urban households was 11,633 yuan, an actual increase of 5.9%. The per capita disposable income of rural households was 4,600 yuan, an actual increase of 6.9 percent. The per capita disposable income of urban households was 2.53 times that of the rural households, 0.02 percentage point less than that of the same period last year. The median of the nationwide per capita disposable income was 7,158 yuan, a nominal increase of 8.8%.

10. Economic structure has been optimized, transformation and upgrading have achieved remarkable results.

The supply-side structural reform has been further advanced. In the first quarter, the national industrial capacity utilization rate reached 75.9%, the second highest level since 2013 compared with the same period in the past. At the end of March, the floor space of commercial buildings for sale was 516.46 million square meters, 6.05 million square meters less than at the end of February, and down by 9.9% year-over-year. At the end of February, the asset-liability ratio of industrial enterprises above the designated size was 56.9%, down by 0.2 percentage point year-over-year. In the first quarter, the investment in ecological protection and the environment governance, and the railway transportation industry went up by 43.0% and 11.0% respectively, 36.7 percentage points and 4.7 percentage points higher than the growth rate of the total investment.

Steady progress was made in advancing the "three critical battles"– preventing and defusing financial risks, conducting targeted poverty eradication and controlling pollution. At the end of February, the balance of local government debt stood at 19.14 trillion yuan, which was within the limit approved by the National People's Congress. The work in poverty eradication has progressed steadily, with the per capita disposable income for rural households in impoverished areas registering fast growth. The work of pollution prevention and control has continued to show results and the share of clean energy consumption has increased. According to preliminary estimates, the share of consumption of clean energy such as natural gas, hydropower, nuclear power and wind power in total energy consumption in the first quarter was 1.5 percentage points higher than that of same period last year. The energy consumption per unit GDP went down by 2.7% year-over-year. 

The economic structure has been optimized continually. In the first quarter, the value added of the tertiary industry accounted for 57.3% of total GDP, up 0.6 percentage point year-over-year, 18.7 percentage points higher than that of the secondary industry. It contributes 61.3% to GDP growth, which is 24.4 percentage points higher than that of the secondary industry. Consumption continued to perform as the dominant driving force from the demand side with final consumption expenditure contributing 65.1% to GDP growth. Service consumption took up 47.7% of households' final consumption expenditure, 1.4 percentage points higher than that of the same period last year. With the integrated development of the eastern, central, western and northwestern regions, achievements in the coordinated development of the Beijing-Tianjin-Hebei region has made good progress. There has also been accelerated implementation of close coordination on environmental protection along the Yangtze River Economic Belt. The integrated development of the Yangtze River Delta has steadily advanced and the Outline Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area has been released. The building of the Hainan Pilot Free Trade Zone and its layout of development has also been further improved. 

11. Market expectations improved notably and the confidence in development has been strengthened.

The Manufacturing Purchasing Managers' Index (PMI) returned to the expansionary range. In March, the Manufacturing PMI was 50.5%, 1.3 percentage points higher than that of February. This brought it back to the range of expansion after staying below the threshold for three months in a row. All five sub-indices rebounded, among which the Production Index and the New Orders Index went up by 3.2 percentage points and 1 percentage point respectively. The Production and Operation Expectation Index was 56.8% , 0.6 percentage point higher than that of February. The Business Activity Index for Non-Manufacturing Industries stayed within the range of expansion. In March, the Business Activity Index for Non-Manufacturing Industries was 54.8%, 0.5 percentage point higher than that of last month. The Business Activity Index for services was 53.6%, 0.1 percentage point higher than that of last month. The New Orders Index for services stayed within the expansionary range for three consecutive months. The Business Activity Index for construction stood at 61.7%, within the expansionary range. The Composite PMI Output Index showed a marked rise. In March, the Composite PMI Output Index was 54%, 1.6 percentage points higher than that of last month. The expansion of production and operation of enterprises accelerated in general. In the first quarter, the Consumer Confidence Index was 124.6, 3.2 percentage points higher than that of the fourth quarter last year.

Generally speaking, the national economy performed within an appropriate range in the first quarter, sustaining the momentum of progress with growing positive factors in the economy's overall stability. This has laid a sound foundation for the stable and healthy economic development of the whole year. However, at the same time we should also be aware that given slowing global economic growth and international trade as well as growing international uncertainties and prominent domestic structural issues, the task of reform and development is arduous and an economic downward pressure still persists. At the next stage, taking Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era as the guideline, we should fully implement the spirit of the Central Economic Work Conference and the decisions of the Report on the Work of the Government. We should also follow the general working guideline of making progress while maintaining stability, focus on supply-side structural reform, and make continuous efforts to win the "three critical battles." In addition, we should also take coordinated steps to achieve steady growth, advance reform, make structural adjustments, improve living standards, guard against risk and maintain stability. We want to also fully mobilize the initiative of all sectors of the society, and redouble efforts to implement policies in order to make the national economy perform within an appropriate range and promote high-quality development. Thanks!

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