Viewing China’s Economic Resilience from Key Data

Xinhua News Agency, Beijing, July 15th Question: Looking at China’s economic resilience from key data.

Xinhua News Agency "Xinhua Viewpoint" reporter Zou Duowei, Shu Jing, Song Jia

On 15th, the economic performance of China in the first half of 2022 was announced: the gross domestic product (GDP) was 56,264.2 billion yuan, up 2.5% year-on-year. What do you think of this "report card" under the background that unexpected unexpected factors have brought serious impact and the downward pressure on the economy has increased significantly in the second quarter? How resilient is China’s economy?

GDP increased by 2.5% year-on-year: economic operation stabilized and rebounded.

In the first half of the year, China’s GDP increased by 2.5% year-on-year. In April, when the main economic indicators fell deeply, the economy achieved positive growth in the second quarter despite the pressure.

Fu Linghui, spokesperson of the National Bureau of Statistics and director of the National Economic Statistics Department, said at the press conference of the State Council Office on the 15th that with the efficient coordination of epidemic prevention and control and economic and social development and the effective implementation of a package of policies and measures to stabilize the economy, the overall economic operation showed a trend of stabilization and recovery.

However, he also pointed out that the risk of stagflation in the world economy is rising, the policies of major economies tend to tighten, the impact of domestic epidemics has not been completely eliminated, demand contraction is intertwined with supply shocks, market players are still difficult to operate, and the foundation for sustained economic recovery is unstable.

Yang Guangpu, an associate researcher at the State Council Development Research Center, said that it is necessary to grasp the critical period of economic recovery, continue to pay close attention to the implementation of various policies and measures to stabilize growth, continue to increase effectiveness, activate power and add momentum, and constantly consolidate the foundation of stable economic recovery to ensure that the economy operates in a reasonable range.

Total consumption exceeds 21 trillion yuan: it is expected to continue to recover.

In the first half of the year, the total retail sales of social consumer goods was 21,043.2 billion yuan, down 0.7% year-on-year.

In April, the year-on-year growth rate of total retail sales of social consumer goods reached the lowest level since the first half of this year. In May and June, after that, with the effective control of the epidemic situation and the effective promotion of consumption policies, domestic consumption rebounded steadily. Especially from the situation in June, there have been positive changes in domestic market sales, including the rebound in the growth rate of retail sales of most commodities, the improvement in the consumption of bulk commodities such as automobiles and household appliances, and the obvious improvement in the consumption of services such as catering.

Fu Linghui believes that China’s consumption scale is expanding, consumption structure is upgrading, and the trend of consumption pattern innovation will not change. In addition, social security is constantly improving, and the policy of stabilizing employment and promoting consumption continues to exert its strength, and consumption is expected to continue to recover.

Foreign trade increased by 9.4% year-on-year: showing strong resilience.

In the first half of the year, the total import and export value of China’s goods trade was 19.8 trillion yuan, up 9.4% year-on-year. Foreign trade not only grew steadily, but also achieved positive growth year-on-year for eight consecutive quarters.

Li Kuiwen, spokesman of the General Administration of Customs and director of the Statistics and Analysis Department, said that, on the whole, China’s foreign trade import and export showed strong resilience in the first half of the year, with a smooth start in the first quarter. In May and June, the downward trend of growth rate in April was quickly reversed, which laid a solid foundation for maintaining stability and improving the quality of foreign trade throughout the year.

Zhuang Rui, a professor at university of international business and economics National Institute of Opening-up, said that foreign trade enterprises should make good use of the policy of helping enterprises out of difficulties, seize important opportunities such as the Regional Comprehensive Economic Partnership Agreement (RCEP), work hard to stabilize orders and tap more market opportunities, and make every effort to consolidate the current stable and positive trend of foreign trade and lay the foundation for foreign trade to achieve its annual target.

Investment in fixed assets increased by 6.1% year-on-year: the key role of steady growth is expected to increase.

In the first half of the year, the national investment in fixed assets increased by 6.1% year-on-year. From the perspective of the three major areas, the investment in manufacturing industry has the fastest growth rate, reaching 10.4%, and the investment in infrastructure has increased by 7.1%.

Fu Linghui said that steady investment continued to increase, the issuance and use of special bonds accelerated, major projects accelerated, infrastructure investment accelerated, and the key role of investment in steady growth is expected to increase.

In the first half of the year, investment in high-tech industries and social fields both grew rapidly, increasing by 20.2% and 14.9% respectively. On the whole, China’s current investment demand, especially in new infrastructure and other fields, still has great potential, and there is a broad space to stimulate the vitality of market players and expand effective investment.

The per capita disposable income actually increased by 3.0%: faster than the economic growth rate.

In the first half of the year, the per capita disposable income of the national residents was 18,463 yuan, a real increase of 3.0% after deducting the price factor. Compared with the first quarter, although the growth rate has declined, it is faster than the economic growth rate.

The per capita disposable income of urban residents was 25,003 yuan, a year-on-year increase of 1.9%. The per capita disposable income of rural residents was 9787 yuan, a real increase of 4.2% year-on-year.

"Despite the impact of unexpected factors such as the epidemic, residents’ income can still basically keep pace with the economic growth." Yang Guangpu said that as long as the income keeps growing, the basis of residents’ consumption is. With the continuous improvement of the employment situation and further control of the epidemic, residents’ consumption is expected to continue to recover.

CPI rose by 1.7% year-on-year: the overall price situation was stable.

In the first half of the year, the national consumer price index (CPI) rose by 1.7% year-on-year. Among them, it rose by 2.5% in June, but the price situation was generally stable.

Wan Jinsong, director of the Price Department of the National Development and Reform Commission, said that this summer’s wheat harvest has high yield and good quality, and the overall pig production capacity is reasonable and abundant. The production of cattle, sheep, eggs, vegetables and fruits is normal and sufficient, which has a solid foundation for ensuring stable supply and prices.

"After entering the flood season, the supply of fresh goods in some areas may be affected to some extent, and the influence of international input factors may continue. However, the supply capacity of goods and services in China is generally abundant, and the market is increasing its efforts to ensure supply and stabilize prices, and prices are expected to maintain a moderate upward trend." Fu Linghui said.

PPI rose by 7.7% year-on-year: the increase dropped month by month.

In the first half of the year, the national producer price index (PPI) rose by 7.7% year-on-year, which was lower than the 8.1% increase last year. Among them, the second quarter rose by 6.8%. Since the beginning of this year, the year-on-year increase of PPI has dropped month by month.

At the same time, the "scissors difference" between CPI and PPI has further narrowed. In 2021, the "scissors difference" between the two was 7.2 percentage points, and it dropped to 6 percentage points in the first half of this year.

At present, the resumption of work and production in various places continues to advance, and the supply chain of key industrial chains is gradually smooth and stable. In response to the rise in commodity prices, the relevant state departments actively responded by taking timely measures such as two-way regulation of supply and demand and joint supervision of futures and spot markets, resolutely curbing unreasonable price increases and promoting an orderly decline in PPI growth.

Guo Liyan, director of the Comprehensive Situation Research Office of China Macroeconomic Research Institute, said that with the tightening of global liquidity, international commodity prices have fallen, which has weakened the import impact on China. At the same time, the effect of domestic supply and price stability continues to appear, and it is expected that PPI will continue to decline.

6.54 million new jobs were created: various policies to stabilize employment were gradually implemented.

In the first half of the year, 6.54 million new jobs were created in cities and towns nationwide, accounting for 59% of the annual target, and the national urban survey unemployment rate averaged 5.7%.

"With the joint efforts of all parties, with the gradual recovery of the economy and the gradual implementation of various stable employment policies, the trend of rising unemployment rate in urban surveys has been reversed." Fu Linghui said.

Judging from the situation in the second quarter, the employment of the main population aged 25 to 59 is generally stable, and the employment situation of migrant workers has also improved, but the employment pressure of young people is still relatively high.

Fu Linghui said that we must continue to do a good job in stabilizing employment, especially for key groups. It is necessary to further implement the policy of stabilizing employment, implement employment assistance, and promote the employment situation to continue to improve.