Shou Xiaoli:

Thank you, Mr. Mao. So now we will open the floor to questions, please identify the news organization you represent before asking your question.

CCTV:

According to your briefing, China's economic growth in the first quarter exceeded expectations. The statistics in the industrial and consumption fields were both higher than expected, and major indexes have rebounded. What's your view on China's economic performance in the first quarter? Thank you.

Mao Shengyong:

Statistics show that China's economic performance was stable in the first quarter. In particular, many indexes in March were higher than expected. People have been increasingly optimistic about the market and the number of positive factors has increased. Since the beginning of the first quarter, the Chinese economy has enjoyed steady performance while gathering momentum. I would like to summarize the situation into three points, which may sound cliché, but contain new information.

My first point of view is that the economic performance stayed within a reasonable range. This was shown by the main economic indexes, such as growth, employment, price and income.

Firstly, in the first quarter, GDP grew by 6.4%, obviously higher than market expectations. The figure was previously expected to be 6.2 percent or 6.3 percent.

Second, regarding employment, the surveyed unemployment rate of urban areas was registered at 5.1%, 5.3% and 5.2% in the first three months respectively. The figure dropped 0.1 percentage point from 5.3% in February to 5.2% in March. In the first quarter, the number of newly employed people in urban areas totaled 3.24 million, fulfilling 29.5% of the annual target. The general situation on employment has been stable.

Third, regarding price, the consumer price index (CPI) continued to rise slightly, up by 1.8% on average in the first three months. The producer price index for industrial products (PPI) continued to rise modestly, up by 0.2% on average in the first three months. In March, the CPI growth rate was a bit higher, up by 2.3% year-on-year, while PPI rose slightly by 0.4% year-on-year. The changes show that demand and supply in the market have been more balanced. While supply was sufficient in quantity and better in quality, prices rose slightly, indicating that market demand had improved.

Fourth, regarding income, in the first quarter, the real increase of personal per capita disposable income was 6.8%, 0.2 percentage points higher than the same period of last year. Taking into account the GDP growth rate of 6.4%, the growth of income outpaced GDP in the first quarter. In addition, the gap between the income of urban and rural residents narrowed. The per capita disposable income of urban residents was 2.53 times that of rural residents, 0.02 less than that of the same period last year.

The main indexes indicated that China's economic performance stayed within a reasonable range. This was not easy. 

The second point is that the economic structure has been optimized and upgraded. The structural reform of the supply side has continuously advanced this year. Three hard battles against grave risks, poverty and pollution are yielding results. The economic structure is continually developing in the direction of optimization, adjustment and upgrading. 

This can be seen according to the following angles. First, in terms of industrial structure, the service sectors have maintained comparative fast growth. The proportion of added value of the service sectors to GDP continuously increased in the first quarter, hitting 57.3%, up 0.6 percentage point year-over-year, and the rate of increase is higher than that in the same period last year. Second, in terms of the structure of industries, the growth of high-tech industries and strategic emerging industries remains comparatively fast, up 7.8% and 6.7% respectively. Third, the modern service industries have also kept up rapid growth.

Secondly, in terms of the structure of demand, first of all, the foundation for consumption to play a core role or act as a leading power to stimulate demand is comparatively solid. The contribution rate of consumption to economic growth was 65.1% in the first quarter. Among all residents’ consumption expenditure, service consumption accounts for 47.7%, up 1.4 percentage points year-over-year, which means the consumption structure is improving. Second, investment has maintained momentum through a modest rise, and the internal structure of investment is being further optimized. Investment in technical reform, high-tech industries, social fields and some short-slab fields have maintained relatively fast growth, which will add more impetus to future development. Third, the structure of foreign trade is being enhanced. The General Administration of Customs also released relevant data showing that in the first quarter, the share of general import-export trade is 1.3 percentage points higher than that in the same period last year. 

Thirdly, in terms of regional structure, the coordination among regional developments has improved. The eastern region continues to play a leading role in innovation-driven upgrades and development. The first-quarter total growth of the added value from high-tech manufacturing in the eastern region was faster than in January and February, and the input in research and development is also increasing continuously. The growth rates of industry and investment in the central and western regions are markedly higher than the national average, showing growing advantage to accepting industries transferred from the east. Although the growth speed of northeast China is a bit lower than the national average, an accelerating trend compared with the same period of last year is evident. The key regional development strategies, such as the Yangtze River Economic Belt, Beijing-Tianjin-Hebei Coordinated Development, and Guangdong-Hong Kong-Macao Greater Bay Area, are all making solid progress.

My next point relates to the notable improvement in market expectations. It is self-evident that the external environment since the second half of last year has been less promising. Based on certain global statistics, growth in international trade and the global economy is slowing, and some leading indicators have also experienced recession to varying extents, which all contribute to lower expectations for global economy. Nevertheless, the confidence and prospects for China's economic growth have steadily improved, which came not without effort, as China owes its stronger market expectations and confidence to the introduction and implementation of a series of policies for reform and opening up. Policies ensuring tax cuts and fee reductions on a larger scale and with greater efforts, which was introduced at this year's NPC & CPPCC sessions, provided a huge boost to the market. Compared with the statistics from February, the PMI in March saw a rise of 1.3 percentage points, while the Business Activity Index for Non-Manufacturing Industries in March also grew by 0.5 percentage point. Additionally, the Consumer Confidence Index was 3.2 percentage points higher than that of the fourth quarter last year.

In addition, some international organizations also raised their expectations of China’s economic growth. For example, the IMF, in its latest report, raised the expectation from 6.2% to 6.3%. Some international investment banks, too, are raising their outlooks on China’s economic growth. Therefore, both Chinese producers and consumers, and foreign organizations have an optimistic outlook on China’s economic growth, and their confidence in Chinese market has increased. Faced with various uncertainties from the external environment and tough challenges posed by domestic reforms, it is not an easy thing to achieve this greatly improved confidence in the market.

However, we should also be aware that at present, the growth of the global economy and of international trade are slowing, and there are still many international uncertainties. Although China's GDP grew by 6.4% in the first quarter of this year, and generally performed better than market expectations, it still declined compared with the same period last year, as well as with last year on the whole, suggesting that the economic downward pressure persists. Therefore, in the next period, we will follow the decisions and arrangements set by the CPC Central Committee and the State Council, and will better implement major policies and measures to ensure the economy operates in an appropriate range, and to march on toward high-quality development. Thank you.

Related

Go to Forum >>0 Comment(s)