China’s economy has been running in an appropriate range and growing steadily since the beginning of this year, even though there has been a slowdown of some economic indices in April.
Increase in economic growth rate
There is a pickup in the economic growth rate. In the first quarter, GDP grew 6.9 percent year-on-year, a growth rate 0.2 percentage points higher than last year. The economic growth rate has remained stable between 6.7 percent and 6.9 percent for seven consecutive quarters.
Employment also remained stable in the first quarter, during which 4.65 million jobs were created, 220,000 more than the same period of last year, while the national urban unemployment rate declined around 5 percent.
In the first quarter, CPI and per capita income increased 1.4 percent and 7 percent, respectively.
Also, cargo imports and exports grew steadily, and RMB exchange rate and foreign exchange reserves remained stable. At the end of April, the central parity rate of RMB against the US dollar rose to 6.89, 0.09 percent higher than last month, and foreign exchange reserves reached $3.03 trillion, increasing for three months in a row.
Structural reform continues
Efforts to promote supply-side structural reform have paid off. In the first quarter, 31.7 and 68.97 million metric tons of steel and coal capacity were cut nationwide.
Areas of residential housing for sale decreased 7.2 percent by the end of April, and asset-liability ratio of industrial enterprises above designated size fell 0.7 percentage points to 56.2 percent at the end of March.
Also, investments in the weak links in environment, public facilities and water facilities increased 50.4 percent, 28.4 percent and 16.1 percent, respectively.
As a result, in the first quarter, producer prices rose 7.2 percent year-on-year, profits of industrial enterprises above designated size rose 28.3 percent, and Purchasing Managers Index (PMI) stood at 51.2 percent, up 1.1 percentage point year-on-year.
Industrial structure has seen upgrades. In the first quarter, the value added of primary industry and industries above the designated scale increased 3 percent and 6.7 percent year-on-year.
Also, service industry has become the largest industry driver. In the first quarter, the added value of the tertiary industry made up 56.5 percent of China’s GDP, 17.8 percentage points higher than the secondary industry.
Domestic demand has become a major engine of China’s economy. In the first quarter, the contribution rate of domestic demand to the economy hit 95.8 percent, 91.6 percentage points higher than overseas market demand. Also, the contribution rate of final consumption expenditure to the economy rose to 77.2 percent, up 2.2 percentage points year-on-year.
In the first quarter, total retail sales of consumer goods hit 11 trillion yuan, a year-on-year increase of 10.2 percent, and investment in the high-tech industry and the service sector increased 22.6 percent and 12.1 percent, respectively.
In addition, imports and exports remain stable and grew by 20.3 percent and 14.7 percent year-on-year.
Science and technology innovation
This year, China has seen a booming of new business and products, inspired by the mass entrepreneurship and innovation campaign and the innovation-driven strategy.
Research and development in integrated circuits, artificial intelligence and biotechnology has seen rapid growth, and civil-military integration has been steadily promoted.
The cargo spacecraft Tianzhou-1 was launched and docked with the orbiting Tiangong II space lab, the domestically developed aircraft C919 made its maiden flight, and the world’s first photon quantum computer was created in China, all of which show the country’s strong momentum in science and technology development.
Industrial application of those results has been effective. In the first quarter, the value added of strategic emerging industries, high-tech industries, and manufacturing industries rose 10.3 percent, 13.1 percent and 11.5 percent, respectively. Also, there were 950,000 patents submitted for application, an increase of 6.5 percent year-on-year.
The Internet Plus action plan has also seen rapid development. In the first quarter, total retail sales of online consumer goods and services reached 1.92 trillion yuan, an increase of 32 percent year-on-year. Fast growth was also seen in new service businesses such as industrial robots, sport-utility vehicles (SUV), solar cells and smartphones.
Spatial structure of economic development
Economic potential has been further tapped with development of the Belt and Road Initiative, Beijing-Tianjin-Hebei (BTH) region and Yangtze River economic zone.
In the first quarter, China’s total export-import volume to countries along the Belt and Road increased 26.2 percent year-on-year, 4.4 percentage points higher than total volume. Non-financial investments to 43 countries along the Belt and Road reached $2.95 billion, making up 14.4 percent of total overseas investments.
The Xiongan New Area was set up in Hebei province, as part of measures to advance the coordination of the BTH region.
In addition, the eastern region of China is playing a role in leading the economy, and the central and western regions are growing fast.
In the first quarter, the growth rate of value added in industries above a designated scale in the central and western regions surpassed the national average by 1.2 percentage points and 1 percentage point, and fixed-asset investment by 1.4 and 2.1 percentage points.
Also, the growth rate of value added in industries above a designated scale in the eastern region rose 0.7 percent year-on-year, after a drop in the last year, and fixed-asset investments dropped 18.7 percent, with the pace of decline narrowing compared to last year.