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The Tenacity and Vitality of China's Economy

Submit Time:23-05-2018 | Zoom In | Zoom Out

Author:Zhou Renjie | Source:People’s Daily (Page 05, April 18, 2018)

Abstract:

China’s economy is highly tenacious, with great potential and vitality, and it is sure to build an immune barrier against economic risks.  

Steady progress was made in the transformation and upgrading, and the quality and efficiency of the economy continued to improve. The national economy started well in the first quarter. The first quarter economic data released by the State Statistics Bureau on the 17th drew high attention and positive comments from all walks of life. In general, steady growth and prices and improving employment and people's livelihood fully demonstrated the effect of transformation of motive force, efficiency increase and quality improvement in the national economy, as a powerful response to the questioning and badmouthing of the tenacity and vitality of China’s economy under the background of trade frictions. In the dimensions of pursuing for high quality development, let’s make an analysis of the features of the China’s economy in this period.  

Macroscopically, the main economic indicators are within the reasonable zone. The GDP saw a growth of 6.8% in the first 3 months, continuing the trend of medium-high rate of growth. The consumer prices nationwide rose 2.1% year on year, mild as a whole, and it was high in a month but not exceeded the limit, also implying the increase of consumption and domestic demand. The overall employment situation was stable. The surveyed unemployment rate of urban areas was about 5%, down from the previous year; the income of residents grew steadily, and the income of urban and rural residents increased by 8.8% year-on-year. The trade surplus narrowed substantially by 21.8% year on year, and became more balanced. Foreign exchange reserves stood at 3142.8 billion USD, and the international balance of payments continued to be basically balanced. These data with “good face value” proved that both time and momentum were on our side.  

Microscopically, the endogenous motive force was growing in enterprises, especially entity enterprises. A survey by the State Statistics Bureau on 53,000 small and micro businesses in service sector in Q1 showed that, 83.9% enterprises showed good and steady operation; the questionnaire survey by the People’s Bank of China showed that in Q1, the confidence index of entrepreneurs was 74.3%, 2.5 percentage points higher than that of the previous quarter; the private investment grew by 8.9%, with a slight increase in growth rate; the manufacturing purchasing managers' index and the non-manufacturing business activity index remained in the boom range. These data indicated that a good development expectation for the real economy, and that health level of the “economic cells” was at a high level. At the same time, tax revenue increased 17.3% in the first three months of the year, while non-tax revenue decreased by 7.5%. This increase and decrease well demonstrated the improvement in both enterprise efficiency and business operation environment.  

An inquiry of the tenacity showed that there were pain spots, but the potential was also high. In the trade area, experts stated that even if exports of all commodities involved in trade frictions fell, it will not affect our set goal of 6.5% growth for the whole year. Moreover, there is huge opening up potential and substituting effect on the emerging market. In Q1, the import and export trade of China with countries along the Belt and Road, in Latin America and Africa grew respectively by 12.9%, 14% and 12.4% on a year-on-year basis. In the financial sector, the balance of M2 at the end of March grew 8.2% year-on-year, most central enterprises lowered their debt ratio, the macro-prudential policies and financial regulation and coordination were powerful, and some of the risk concentration points were “accurately eliminated”. In the real estate sector, the prices remained stable in tier-1 cities, and underwent some adjustment in tier-2 and 3 cities, further refining the deleverage. Objectively speaking, China’s economy is highly tenacious, with great potential and vitality, and it is sure to build an immune barrier against economic risks.  

As far as innovation is concerned, the pulse of the economic system is solid, with daily growing functions of technological innovation. The past trend of “shifting from real economy to the virtual” made the industrialists helpless, and some local chaos occurred to close the factory to trade on housing and to sell houses to maintain the enterprise. Today, as we accelerated the fostering of new growth drivers, the supply quality is increasing to the medium and high end, the “unicorn” companies are full of vitality, and the potential of “created in China” has burst out. In Q1, the year-on-year increase was 15.2% in IC output, 139.4% in new energy automobiles and 29.6% in industrial robots; the growth rate of the added values of high-tech industries and equipment manufacturing industry was higher than that of industrial enterprises above the designated scale. The economic structure was continually optimized. Inn Q1, the contribution from tertiary industry added value to the GDP growth was 61.6%; and the contribution from end consumption outlay to economic growth reached 77.8%, the space of consumption industry produced by “Internet+” has just opened, and the new technologies, new industries, new business forms and new patterns all run smoothly in unhurried pace.  

The growth trajectory of any excellent economy is upward with fluctuation, and there is no exception for China. We should say that, the China’s economy, built on the foundation of material and spirit deposit over the 40 years of reform and opening up and with institutional mechanism daily mature, is demonstrating a powerful and booming vitality, with tenacity and more vigor, and it will never be defeated by some minor incidents. We have the full confidence and ability to master the external risks and disturbances. At present, favorable conditions supporting the economy in high quality development are growing and accumulating. Next, we should still take initiative and maintain focus, and continue the rational and orderly rhythm of macro level regulation, win the three campaigns with high quality, and continue the development trend of making progress and improvement in stable situation in the path to complete the building of moderately prosperous society in all aspects.  


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