SCIO press conference on national economic performance in H1 2023

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Judging by the data just released, China's economy has continued to recover in the second quarter of this year. How would you evaluate the economic trends of the first half of this year? In addition, what are the characteristics of our country's economic performance? Thank you.

Fu Linghui:

Thank you for your questions. Since the beginning of this year, as the economy and society have fully resumed normal operations, policies aimed at stabilizing growth, employment, and prices have gradually taken effect. Market demand has gradually recovered, production and supply have consistently increased, and employment has remained generally stable. People's livelihoods have been effectively guaranteed, the quality of development has continued to improve, and the national economy is on a path of recovery. The characteristics are primarily as follows: 

First, overall economic growth has picked up. In the first half of this year, China's gross domestic product (GDP) grew by 5.5% year on year, significantly outpacing the 3% growth rate for the entirety of last year and the 4.5% growth rate in the first quarter. Since the beginning of this year, the world has experienced a sluggish economic recovery and relatively high inflation, and contractionary monetary policies in major economies have resulted in significant spillover effects. Faced with a complex and challenging external environment, China's economic growth has been notably faster than that of the world's major developed economies, exhibiting strong resilience.

Second, domestic demand has continued to expand. Various policies and measures aimed at stimulating domestic demand have taken effect, continuously releasing its potential. Notably, consumer spending has significantly boosted economic growth. In the first half of this year, total retail sales of consumer goods grew by 8.2% year on year, maintaining a relatively rapid growth rate. The contribution of final consumption expenditure to economic growth reached 77.2%, significantly higher than that of last year. Investment has continued to grow, and investment in key areas has increased swiftly, playing an effective role in optimizing the supply structure. In the first half of this year, fixed-asset investment grew by 3.8% year on year, with infrastructure and manufacturing investments up by 7.2% and 6%, respectively.

Third, industrial development has been strengthened. Driven by a series of policies and measures to ensure stable agricultural production, increase production, and boost the real economy, the primary, secondary, and tertiary industries have continued to recover, and the foundation for development has been consolidated. Agricultural production has remained stable. A bountiful summer grain harvest has been achieved, and the market supply of vegetables, fruits, meat, poultry, eggs, and milk has generally been sufficient. In the first half of this year, the output of pork, beef, mutton, and poultry increased by 3.6% year on year. Industrial production has continued to recover. In the first half of this year, the value-added of industrial enterprises above designated size increased by 3.8% year on year, a 0.8 percentage point faster than the first quarter. The service sector has grown rapidly. In the first half of this year, the value-added of the service sector grew by 6.4% year on year, outpacing economic growth, with the growth rate of service industries featuring frequent contact or clustering of people, such as wholesale and retail, accommodation and catering, and transportation, picking up significantly.

Fourth, the economic mix has been adjusted and optimized. The industrial structure has continued to improve. In the first half of this year, the value-added of the service sector accounted for 56% of GDP and contributed 66.1% to economic growth, higher than that of the secondary industry. The value-added of the equipment manufacturing industry accounted for 32.3% of the value-added of industries above designated size, an increase of 1.4 percentage points over the same period last year. The structure of consumer spending and investment has improved. In the first half of this year, the retail sales of gold, silver, and jewelry, as well as sports and entertainment goods by enterprises above designated size, increased by 17.5% and 10.5%, respectively, and investment in high-tech industries increased by 12.5%, significantly faster than the growth of total investment.

Fifth, the driving force for innovation has continued to grow. New industries have grown and expanded. In the first half of this year, the value-added of aerospace vehicle and equipment manufacturing above designated size, as well as lithium-ion battery manufacturing above designated size, increased by 22.9% and 29.7%, respectively. The value-added of information transmission, software, and information technology services increased by 12.9%. New forms of business have continued to flourish. In the first half of this year, the online retail sales of physical goods increased by 10.8% year on year, accounting for 26.6% of the total retail sales of social consumer goods.

Sixth, employment and people's livelihoods have been ensured. With the economy recovering, the policy of stabilizing employment has continued to show effects, and the employment situation has gradually improved. In the first half of this year, the average surveyed urban unemployment rate registered at 5.3%, down a 0.2 percentage point from the first quarter, and the figure for June logged at 5.2%, indicating a downward trend since the beginning of the year. Personal income has grown rapidly. In the first half of this year, per capita disposable income rose by 5.8% in real terms, considerably faster than the growth rate for all of last year. The income gap between urban and rural residents has narrowed. In the first half of this year, the ratio of per capita disposable income between urban and rural residents decreased by 0.05 compared with the same period last year.

On the whole, our economy has shown a robust momentum of recovery and solid progress in transformation and upgrading. However, it's important to recognize the complex international political and economic situation, the sluggish global economic recovery, and, consequently, the necessity for intensified efforts to achieve sustained economic recovery. Moving forward, we will thoroughly implement the decisions and arrangements of the Central Committee of the Communist Party of China (CPC), adhering to the general principle of pursuing progress while ensuring stability. With our primary focus on high-quality development, we will implement macro policies in a systemic and targeted way, intensify efforts to expand domestic demand, comprehensively deepen reform and opening up, accelerate the cultivation and strengthening of new economic drivers, and invigorate business entities. The aim is to promote overall economic improvement, strive to realize the effective enhancement of economy's quality and achieve a reasonable growth in quantity.

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