Positive Recovery of National Economy with New Results in High-Quality Development

Positive Recovery of National Economy with New Results 

in High-Quality Development

CPC Party Leadership Group, National Bureau of Statistics

Since 2023, with the downward fluctuation of the world economy, the external environment has become more complicated and severe, and China's economic recovery has faced a lot of difficulties and challenges. Facing such a complicated situation, under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, all regions and departments have earnestly implemented the decisions and arrangements of the CPC Central Committee and the State Council, closely focused on the primary task of high-quality development and the strategic task of building a new development pattern, adhered to the general principle of pursuing progress while ensuring stability, implemented macro policies in a systemic and targeted way, and emphasized on ensuring stable growth and employment, and guarding against risks. The national economy has continued to recover, with an overall upturn and improvement, solid progress has been made in high-quality development, and the overall social stability has been maintained, laying a good foundation for fulfilling the goals of economic and social development set for the year.

I. Continued Recovery of the National Economy and Overall Improvement of Major Macro Indicators

With the full resumption of normalized economic and social operations and the concerted efforts of various macro policies, the economy got off to a good start in the first quarter and continued its recovery in the second quarter, with a gradual recovery in production and demand, an overall stabilization of the employment situation, a basic equilibrium maintained in the balance of payments, and an improvement in the ability to secure food and energy supplies.

Economic growth has picked up overall. According to the preliminary estimates, the gross domestic product (GDP) in the first half of the year was RMB 59.3034 trillion, an increase of 5.5% at constant prices, significantly faster than the economic growth rate of 3.0% in the whole previous year, and significantly faster than the average annual growth rate of 4.5% in the past three years, showing a relatively obvious upturn in economic growth. Under the backdrop of a complex and volatile international environment, a global surge in inflation and weakening growth momentum in major economies, China's overall economic growth has picked up against the tough challenges, demonstrating the strong resilience of the economy. In the first quarter, China's GDP increased by 4.5% on a year-on-year basis, faster than the growth rate of major economies such as 1.8% in the United States, 1.0% in the euro area and 1.9% in Japan. Combined with the international and domestic situation in the second quarter, it is expected that China's economic growth in the first half of the year will remain ahead of the major economies, and continue to serve as an important engine and stabilizing force for world economic growth.

Production and supply have steadily increased. We have accelerated the development of a modern industrial system, made every effort to improve grain production and the supply of important agricultural products, worked hard to stabilize production in key industries, actively promoted the resumption of development of the service sector, sustained recovery of the three industries, and consolidated the foundation for the development of the real economy. Agricultural production has been stabilized. In the first half of this year, the total output value of agriculture, forestry, animal husbandry and fishery increased by 3.9% on a year-on-year basis, of which agriculture (planting) increased by 3.3%. Adequate supply of meat, eggs, milk and other products has met the needs of people's lives and ensured the stable prices of essential commodities. In the first half of this year, the output of pork, beef, mutton and poultry increased by 3.6% year on year, while the output of milk and poultry eggs increased by 7.5% and 2.9% respectively. Industrial production is basically stable. In the first half of this year, the value added of industrial enterprises above designated size increased by 3.8% year on year, 0.2 percentage points higher than that of the whole previous year. Growth has been achieved in most industries and products. In the first half of the year, among the 41 major industrial industries, 26 industries realized growth, with a growth rate of more than 60%; among the 620 major industrial products, 331 products realized growth in output, with a growth rate of more than 50%. Faster recovery has been made in the service sector. In the first half of the year, the value added of the service sector grew by 6.4% on a year-on-year basis, 4.1 percentage points higher than that of the whole previous year. Demand for tourism, accommodation, catering and other services was released at a faster pace, and relevant contact service industries picked up significantly. In the first half of this year, the value added of wholesale and retail trades, hotels and catering services, transportation, transport, storage and post increased by 6.6%, 15.5% and 6.9% respectively.

Domestic demand is gradually recovering. We have firmly implemented the strategy of expanding domestic demand, gave priority to restoring and expanding consumption, and effectively leveraged the key role of investment in improving the supply structure, keeping releasing the potential of domestic demand, and continuously enhancing market vitality. Consumption is growing at a better pace. With the orderly restoration of the consumption scene and the sustained effect of policies to promote consumption, the rebound in consumption has run at an "accelerated pace". In the first half of this year, the total retail sales of consumer goods increased by 8.2% year on year. The consumption of services such as catering and entertainment has rebounded, and the proportion of residents' service consumption expenditure has steadily increased. In the first half of the year, the income of catering industry increased by 21.4%; The income of domestic film box office increased by 52.9%, and the income of commercial performance box office increased by 6.7 times; China's per capita consumption expenditure on services increased by 12.7%, accounting for 44.5% of the total per capita consumption expenditure, a year-on-year increase of 1.7 percentage points. The scale of investment continues to expand. Solid progress has been made in the construction of major projects to strengthen weak spots and make structural adjustments in key areas, achieving increasing investment in fixed assets. In the first half of the year, investment in fixed assets (excluding rural households) increased by 3.8% year on year, of which the investment in manufacturing and infrastructure increased by 6.0% and 7.2% respectively, significantly faster than all investment. Investment in large projects has played an obvious supporting role. In the first half of the year, the investment in large projects with a planned total investment of RMB 100 million and above increased by 10.9% year on year, driving the total investment to increase by 5.5 percentage points.

Employment and prices have generally remained stable. We have given priority to employment, provided supports and incentives to stabilize and expand employment, expanded employment through multiple channels, ensured the supply of important commodities for people's livelihood, and strengthened the reserve adjustment of key commodities, with steady progress being achieved. The employment situation has been improved. With a sustained recovery of the economy and the implementation of policies and measures to stabilize employment, the labor market has become more active, the scale of employment has steadily expanded, and the surveyed unemployment rate has declined. In the first half of the year, the average surveyed unemployment rate in urban areas nationwide was 5.3%, down 0.2 percentage points from the first quarter; 6.78 million new jobs were created in urban areas, a year-on-year increase of 240,000, meeting 56.5% of the annual target. The employment situation of migrant workers has improved. In the first half of the year, the average surveyed unemployment rate of foreign agricultural household registration labor in urban areas, mainly migrant workers in cities, was 5.3%, and the rate was 4.9% in June, the lowest level this year. At the end of the second quarter, the number of migrant workers was 187.05 million, exceeding the level of the same period in 2019, a year-on-year increase of 3.2%. Core consumer prices have remained generally stable. Affected by multiple factors such as imported, cyclical factors and a high base in the same period of last year, the consumer price index (CPI) growth generally declined, but the core CPI growth has remained generally stable with the recovery of service consumption. In the first half of the year, consumer prices rose by 0.7% year on year, and 0.6 percentage point lower than the price hike of the first quarter. The core CPI excluding the prices of food and energy rose by 0.7%, remaining basically stable.

Equilibrium has been maintained in the balance of payments. In the face of the adverse effects of weak world economic recovery, shrinking external demand and intensifying market competition, China has unswervingly advanced high-standard opening up, promoted the steady scale and improved structure of foreign trade, made greater efforts to attract and utilize foreign investment, and continued to optimize the business environment, withstanding the pressure and steadily making improvement in foreign trade and foreign investment, and demonstrating strong international competitiveness. The scale of import and export of goods has increased. In the first half of the year, China's import and export of goods exceeded RMB 20 trillion, reaching RMB 20.1 trillion, a record high in the same period, a year-on-year increase of 2.1%. General trade with a longer industry chain and higher added value has gained a higher proportion, and the capacity for independent trade development has been steadily strengthened. In the first half of the year, the import and export volume of general trade accounted for 65.5% of the total import and export volume, a year-on-year increase of 1.2 percentage points. Private enterprises have grown into the "main force" of foreign trade. In the first half of the year, the import and export volume of private enterprises accounted for 52.7% of the total import and export volume, a year-on-year increase of 3.3 percentage points. Quality of utilization of foreign investment has been improved. In the first half of the year, China set up 24,000 new foreign-invested enterprises, a year-on-year increase of 35.7%. The actual use of foreign investment in high-tech manufacturing industries increased by 28.8%. Foreign exchange reserves are basically stable. At the end of June, the balance of foreign exchange reserves was USD 3,193 billion, an increase of USD 65.3 billion over the end of last year, and has stabilized at over USD 3.1 trillion since the beginning of this year.

Food and energy security has been continuously enhanced. We have insisted on ensuring both development and security, strengthened domestic security capabilities, stabilized sources of imports, and effectively maintained food and energy security. Food production has developed steadily. Another bumper harvest has been yielded in summer, with China's summer grain output reaching 146.15 million tons, ranking the second highest in history. All local governments have fully fulfilled responsibilities in farmland protection and food security, focused on stabilizing grain sowing area, consolidated progress in oil-bearing crops expansion, and made solid progress with regard to field management, achieving normal growth of early rice and autumn grain crops, and laying good foundation in grain production throughout the year. Energy supply has continued to increase. The advanced production capacity of domestic coal has been orderly released, oil and gas reserves and production volumes have continued to increase, and energy supply capacity has continued to improve, effectively guaranteeing the energy for production and life. In the first half of the year, the total primary energy output increased by 2.7% year on year. Among them, the output of coal, crude petroleum oil and natural gas in industries above designated size reached 2.30 billion tons, 105 million tons and 115.5 billion cubic meters, an increase of 4.4%, 2.1% and 5.4%, respectively; The electricity generated reached 4.2 trillion kWh, an increase of 3.8%.

II. Sustained Transformation and Upgrading Trend with Solid Advancement of High-Quality Development

While promoting sustained economic recovery, all regions and departments have unswervingly adhered to high-quality development, applied the new development philosophy in full, in the right way, and in all fields of endeavor, and accelerated the construction of a new development pattern. China has not only achieved new results in promoting reasonable quantitative growth, but also made new progress in effectively improving quality for economic development.

The accumulation of driving forces for innovation has been strengthened. In the face of intensifying competition in the international market and external suppression against China's high-tech sector, China has vigorously implemented the innovation-driven development strategy, focused on improving the overall efficiency of the national innovation system, strengthened the principal position of enterprises in innovation, and continued to strengthen the role of innovation in leading development. Innovative achievements have continuously emerged. This year, the C919 large passenger aircraft has been put into commercial operation, China's first homemade mega cruise ship has successfully undocked, the undersea tunnel of the Shenzhen-Zhongshan Bridge has been successfully completed, and the world's first 16-megawatt offshore wind turbine has been connected to the grid for power generation, and scientific and technological innovation has continued to empower high-quality development. New industries have continued to serve as engines of growth. In the first half of the year, the investment in high-tech industries increased by 12.5% year on year, the value added of information transmission, software and information technology services increased by 12.9%, and the value added of aviation, spacecraft and equipment manufacturing above designated size increased by 22.9%. New products with high technical content and added value have seen good growth. In the first half of the year, the output of new material products such as ultra-white glass, polysilicon and bio-based chemical fibers for the solar industry increased by 89.1%, 86.4% and 84.5% respectively on a year-on-year basis; The output of new energy products such as new energy vehicles, solar cells and charging piles increased by 35.0%, 54.5% and 53.1% respectively. New business models such as live streaming marketing and instant retailing have enhanced their leading role, and online retail has become more active. In the first half of the year, the online retail sales of physical goods increased by 10.8% year on year, raising its share of total retail sales of consumer goods to 26.6%.

The economic structure has continued to improve. With steady implementation of the strategy of expanding domestic demand, continued deepening of supply-side structural reform, and effective advancement of the strategies of new urbanization and rural revitalization, the economic restructuring has been facilitated, and the coordination and sustainability of economic development have been enhanced. The industrial structure has been continuously upgraded. In the first half of the year, the value added of equipment manufacturing industry above designated size accounted for 32.3% of the value added of all industries above designated size, a year-on-year increase of 1.4 percentage points; The value added of the service industry accounted for 56.0% of GDP, contributing 66.1% to economic growth. Consumption has played a stronger role as the main driver. In the first half of the year, final consumption expenditure contributed 77.2% to economic growth, an increase of 44.4 percentage points over the previous year. Investment and consumption structure has been optimized. In the first half of the year, the investment in electronic and communication equipment manufacturing and e-commerce services increased by 14.2% and 22.2% year on year respectively, significantly faster than all investment; Retail sales of gold, silver and jewelry, sports and recreational articles and other upgraded consumer goods by enterprises above the designated size increased by 17.5% and 10.5% respectively. The income gap between urban and rural residents has narrowed. In the first half of the year, the ratio of disposable income per capita of urban and rural residents was 2.50, a year-on-year decrease of 0.05.

Remarkable progress has been made in green and low-carbon transformation. We have firmly upheld and acted on the principle that lucid waters and lush mountains are invaluable assets, adhered to the path of green development, coordinated efforts to cut carbon emissions, reduce pollution, expand green development, and pursue economic growth, and accelerated the formation of environment-friendly production modes and living patterns. The efficiency of energy and resource utilization has been improved, and energy use intensity has continued to decline. According to the preliminary estimates, the energy consumption per unit of GDP in the first half of the year fell by 0.4% on a year-on-year basis, a decline of 0.3 percentage points over the previous year as a whole. Clean energy has continued to grow and develop. In the first half of the year, the investment in clean power increased by 40.5% year on year, accounting for 86.1% of all investment in power supply, a year-on-year increase of 1.1 percentage points; The total electricity generated by wind, solar and nuclear power accounted for 18.5% of all power generation, a year-on-year increase of 1.3 percentage points. Ecological and environmental governance has continued to be strengthened, with overall improvement in environmental quality. In the first half of the year, of the sections under the national monitoring program for surface water, 87.8% were of fairly clean water quality (Grade I to III), a year-on-year increase of 2.1 percentage points. The proportion of days with good or excellent air quality reached 81.4% in the monitored 339 cities at the prefecture level and above.

High-level opening up has been continuously deepened. we have unswervingly advanced a broader agenda of opening up across more areas and in greater depth, steadily extended institutional opening up, continuously expanded all-round economic and trade cooperation, maintaining a good momentum of innovation and development in foreign trade, and steadily advancing the building of a new system for an open economy at a higher level. We have worked hard to deliver concrete results in advancing Belt and Road cooperation. In the first half of the year, the import and export volume between China and countries along the Belt and Road increased by 9.8% on a year-on-year basis, 7.7 percentage points faster than the growth rate of all imports and exports, accounting for 34.3% of the total import and export volume, a year-on-year increase of 2.4 percentage points. The Regional Comprehensive Economic Partnership (RCEP) has been expanded and improved. On June 2, RCEP came into full effect for 15 member countries, unleashing the market potential of the world's largest free trade area and bringing industrial chain cooperation closer. In the first half of the year, China's exports to other RCEP member countries increased by 6.1% year on year, 2.4 percentage points faster than all exports. Cross-border e-commerce and other new forms of foreign trade have developed rapidly, and the pilot free trade zones have further highlighted their ability to take the lead and offer guidance. In the first half of the year, the import and export volume of cross-border e-commerce increased by 16% year on year; The import and export volume of the pilot free trade zones and Hainan Free Trade Port increased by 8.6% and 26.4% respectively.

People's basic living needs have been well ensured. Adhering to the philosophy of people-centered development, we have focused on solving the most pressing difficulties of high concern to the people, made greater efforts to ensure and improve people's livelihood, steadily improving people's living standards, and further enhancing the people's sense of gain, happiness and security. The recovery of the economy and the improvement of the employment situation have led to steady growth of residents' income. In the first half of the year, the per capita disposable income nationwide was RMB 19,672, a nominal year-on-year increase of 6.5%, and the actual increase after deducting price factors was 5.8%. Among them, the nominal growth of per capita wage income and per capita net operating income was 6.8% and 7.0% respectively. The investment in people's livelihood has continued to increase. In the first half of the year, the nominal year-on-year increase of per capita income from social relief and subsidies was 14.7%, maintaining relatively rapid growth. Of the national general public budget expenditures, the expenditures on health, social security and employment, and housing security increased by 6.9%, 7.9% and 8.5% respectively year on year. The coverage of social insurance has continued to be widened. At the end of June, the numbers of people covered by basic endowment, unemployment and work-related injury insurances nationwide were 1.057 billion, 240 million and 294 million respectively.

III. Unwavering Promotion of High-Quality Economic Development with Firm Confidence and Steady Progress

In the second half of this year, the external environment will be complex and severe, which in turn will influence China's development in many aspects, such as insufficient domestic demand, difficulties in the operation of some enterprises, and a lot of risks and hidden dangers in key areas. Despite the difficulties and pressures, we have to note that China's economy has remained developing after overcoming difficulties, growing in the midst of wind and rain, and getting stronger through vigorous endeavors. China has obvious advantages in a complete industrial system, a super large-scale market, and talent and human resources. The dividends of reform and opening up have been continuously released, and the fundamentals of the Chinese economy with long-term sustainability and the general trend of high-quality development have remained unchanged. With the enhancement of the endogenous driving force for economic growth and the effective implementation of macro policies, the steady recovery of the economy toward high-quality development will be further consolidated. Next, we should adhere to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, remained true to the general principle of pursuing progress while ensuring stability, fully and faithfully applied the new development philosophy on all fronts, accelerate the construction of a new development pattern, comprehensively deepen reform and opening up, strengthen macro-policy regulation and control, focus on expanding domestic demand, boosting confidence, and preventing risks, continuously promote the recovering of economic operation, the enhancement of endogenous driving force, the improvement of social expectations, and the resolution of hidden risks, so as to promote the effective improvement of quality and reasonable growth of the economy.

Macro policies should be accurately and effectively implemented. We should continue to implement a proactive fiscal policy and a prudent monetary policy, effectively extend, optimize, improve and implement the tax and fee reduction policies, give full play to the role of aggregate and structural monetary policy tools, and vigorously support scientific and technological innovation, the real economy, and the development of micro, small and medium-sized enterprises. We should strengthen the coordination and cooperation of various policies, maximize the comprehensive effect of policies, and form synergy for jointly promoting high-quality development.

Great efforts should be made to expand effective domestic demand. We should lead and create demand with high-quality supply, accelerate the upgrading of consumption, and foster and expand green consumption and service consumption. We should boost bulk commodity consumption of automobiles, electronic products and household appliances, and encourage spending on new energy vehicles and green and smart home appliances in rural areas. We should better leverage the driving role of government investment, and encourage and attract more private capital to participate in the construction of major national projects and projects for making up for weaknesses.

The construction of a modern industrial system should be accelerated. We should coordinately push forward the transformation and upgrading of traditional industries and the cultivation and growth of emerging industries, promote the high-end, intelligent and green transformation of the manufacturing industry, and explore more new sectors and new business tracks. We should also accelerate the research in key and core technologies, foster greater strength and self-reliance in science and technology, promote technological innovation, transformation and application, and advance the upgrading of the industrial foundation and the modernization of industrial chain.

Great efforts should be made to stimulate the vitality of business entities. We should advance reforms for the market-based allocation of production factors, accelerate the construction of a high-standard market system, and foster a market-oriented and law-governed business environment up to international standards. We should unswervingly consolidate and develop the public sector and unswervingly encourage, support, and guide the development of the non-public sector, effectively improve the core competitiveness of state-owned enterprises, practically optimize the environment for developing private businesses, and boost the development confidence of the main business entities. We should adhere to the problem-oriented approach, focus on the actual needs of enterprises, and accelerate the introduction of targeted and high-quality policies and measures to effectively enhance the sense of gain of enterprises.

High-standard opening up should be promoted. We should effectively implement policies and measures to stabilize the scale and optimize the structure of foreign trade, actively leverage the role of key foreign trade exhibitions, and endeavor to stabilize the share in the international market. We should make greater efforts to attract and utilize foreign investment, and continue to promote the construction of major foreign-invested landmark projects. We should deepen the reform of the system and mechanism in the field of trade and investment, and closely integrate the construction of a new system of open economy of higher standards with national strategies such as the high-quality Belt and Road cooperation.

     Efforts should be made to actively protect people's livelihoods, prevent risks and promote stability. We should strengthen the orientation of giving priority to employment, further expand the employment channels for college graduates, and stabilize the employment of key groups such as migrant workers. We should adopt city-specific policies and make good use of the policy toolbox to better support people in buying their first homes or improving their housing situation, and continue to guarantee house delivery, people’s livelihood and stability. A transparent and predictable normalized regulatory system should be improved to promote the sound and sustainable development of platform enterprises. We should effectively forestall and defuse local government debt risks, and formulate and implement a package plan to clear debts. We should strengthen the supply of energy and power to meet the demand during peak summer, and work hard on disaster prevention, mitigation and relief, as well as safety production.

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