China National Radio:
Investment in the real estate sector is still growing rapidly. Some scholars seem to feel the development of the real economy has not been as fast as expected. Is there a possibility that more money goes into the virtual economy instead of the real economy in China? What's your opinion on this issue? What policy tools can be used to promote healthy development of the real economy?
Ning Jizhe:
We can understand the real economy in both a broad and narrow sense.
Normally, the industrial, agricultural and service sectors all belong to the real economy. The production scale of China's industrial sector is the largest in the world, with output of more than 200 industrial products ranking first in the world. This also applies to the agricultural sector, with the production of grains, cotton and edible oil all ranking first. The service sector, including transportation and commodity circulation, has also gradually taken up a larger share of the country's GDP. Therefore, China remains a big power in the world in terms of the real economy.
As far as the real estate market is concerned, if a property is bought for speculation, it should not be included in the real economy. However, if it is bought for self-use, then it should be included. We must analyze case-by-case.
Regarding your first question, I'm afraid the case is true in some particular areas. But the fluctuations in the capital market, which have aroused public concern, are being kept under control. We have made much progress in developing the real economy and increasing financial efficiency.
In the future, we will continue to avoid risks caused by excessive market fluctuations, thus promoting steady development of the real economy. Thank you.
Reuters:
I have two questions. First, the growth of China's GDP was 6.7 percent overall last year, but 6.8 percent in the fourth quarter. And we also notice that the loan increment hit a record high and the investment of State-owned agencies increased very fast, sparking concerns over China's rising debt ratio, so, what's your opinion on this issue? The second question is: The National Bureau of Statistics said it would include the online ride-hailing and sharing economy into GDP; how is that going on?
Ning Jizhe:
As the Chinese economy grows, the loans granted, including aggregate financing, have shown a remarkable increase. However, the growth of M2 money supply slowed down compared to the previous two years and currency liquidity is within a reasonable range. The GDP growth figures we released reflect real growth after deducting price factors, while that of M2 is nominal growth. So, there seems to be a wide gap between the two figures. However, the nominal growth of GDP last year was 8 percent, not much lower than the M2 increase rate. The debt ratio of industrial enterprises with annual sales revenue of 20 million yuan or more is decreasing, though slowly. That's still a good trend – the debt ratio and leverage ratio are moving downwards. Credit loans and indirect financing are the mainstream financing methods in China and it's necessary to inject a certain amount of capital to boost the real economy. Therefore, there's no need to worry about the Chinese enterprise debt ratio. It's agreed internationally that China's government debt ratio is relatively low among major economies.
The sharing economy, online ride-hailing services and once popular vacation timeshare ownership have made statistics more difficult to calculate. We're still searching for an adequate calculation method, so they weren't included in last year's GDP. As for those factors with an internationally-agreed calculation method, we have already included them into our GDP calculation. For example, we began including R&D according to the System of National Accounts 2008. We'll continue to conduct research into the calculation of those factors you just mentioned.