Speaker:
Mao Shengyong, spokesperson of the National Bureau of Statistics

Chairperson:
Xi Yanchun, vice director-general of the Press Bureau, State Council Information Office

Date:
April 17, 2017

Xi Yanchun:

Ladies and gentlemen, good morning. Welcome to this press conference held by the State Council Information Office. Today, we are delighted to be able to invite Mr. Mao Shengyong, spokesperson of the National Bureau of Statistics, to brief us on China's economic performance in the first quarter. He will also answer your questions. Now, let's welcome Mr. Mao to give his briefing.

Mao Shengyong:

Ladies and gentlemen, friends from the media. Good morning.

Please allow me to brief you on China's economy. I'll answer your questions later.

China's economy did well in the first quarter.

So far this year, China's economy has maintained the good momentum in the latter half of last year, with steady progress. More and more positive changes have taken place, and major economic indices were better than we expected. We have made a good start, laying a solid foundation for completing the annual growth targets.

Preliminary statistics show that national GDP reached 18.07 trillion yuan in the first quarter, growing 6.9 percent calculated at constant prices. The added value achieved by the primary, secondary and tertiary sectors was 865.4 billion yuan, 7.00 trillion yuan and 10.20 trillion yuan respectively, representing growth of 3.0 percent, 6.4 percent and 7.7 percent year-on-year. From a month-on-month perspective, national GDP grew 1.3 percent overall.

1. Agricultural production was stable, with an improved mix of agricultural products.

According to a survey of 110,000 farmers nationwide, the rice planting area targeted this year decreased 0.3 percent, wheat decreased 0.8 percent and corn decreased 4.0 percent; soybean increased 8.1 percent, but cotton declined 0.7 percent. Currently, winter wheat is growing well, with 84.8 percent of the fields reaching either the Class I or Class II standard.

In the first quarter, the amount of pork, beef, mutton and poultry meat totaled 22.49 million tons, up 0.2 percent on an annual basis. The figure for pork was 14.68 million tons, up 0.2 percent. The number of hogs totaled 410.95 million, up 0.1 percent on an annual basis. Of them, 191.49 million hogs were slaughtered, up 0.2 percent.

2. Industrial production accelerated with fast growing corporate profits.

In the first quarter, the total added value of industrial enterprises above designated size registered a year-on-year increase of 6.8 percent in real terms. This was 1.0 percentage points higher than the same period of last year, or 0.8 percentage points higher than the whole of last year. An analysis by types of ownership showed that the state holding enterprises saw a gain of 6.2 percent; collective enterprises were up 0.5 percent; share-holding enterprises achieved a 6.9 percent increase; and enterprises funded by foreign investors or investors from Hong Kong, Macao and Taiwan rose 6.9 percent. The added value of the mining industry fell 2.4 percent year-on-year; manufacturing rose 7.4 percent and the production and supply of electricity, heat, gas and water saw a gain of 8.9 percent. The industrial structure continued to improve. The added value of the high-tech and equipment manufacturing industrial sector grew by 13.4 percent and 12.0 percent respectively, 6.6 percentage points and 5.2 percentage points higher than that of industrial enterprises above designated size, or respectively 2.6 percentage points and 2.5 percentage points higher than last year. The sales-output ratio of industrial enterprises above designated size was 97.2 percent. In March, the total added value of industrial enterprises above designated size increased by 7.6 percent year-on-year, 1.3 percentage points higher than the first two months, or up by 0.83 percent month-on-month.

In the first two months, total profits made by industrial enterprises above designated size stood at 1.02 trillion yuan, up 31.5 percent year-on-year, 23.0 percentage points higher than that of last year. The profit rate from their primary activities was 5.92 percent, 0.8 percentage point higher than the same period of last year.

3. Services sector grew at a relatively fast pace with high prosperity index.

In the first quarter, the index of services production increased by 8.3 percent year-on-year, 0.1 percentage point higher than the same period last year. Information transmission, software and information technology services, and transport, storage and postal services delivered a strong performance. The growth of wholesale and retail trade, and the accommodation and catering industry picked up speed. In March, their index of services production grew by 8.3 percent, 0.1 percentage point higher than that of the first two months, the same rate as the same period of 2016.

In March, the business activity index for services stood at 54.2 percent, 1.0 percentage point higher than the previous month and 1.1 percentage points higher than the same month last year, a continued high on the prosperity index. Specifically, the business activity index for sectors such as retail, air transport, postal services, internet and software information technology services, monetary and financial services, capital market services and insurance stayed within the relatively prosperous range of over 55.0 percent.

4. Investment in fixed assets witnessed steady growth and the available floor space of commercial buildings for sale continued to decrease.

In the first quarter, the total investment in fixed assets (excluding rural households) was 9.38 trillion yuan, up 9.2 percent year-on-year, 1.1 percentage points higher than that of last year, and 0.3 percentage point up on the first two months of this year. Of the total, investment by state holding enterprises reached 3.31 trillion yuan, an increase of 13.6 percent; private investment reached 5.73 trillion yuan, up 7.7 percent, 1.0 percentage point higher than in the first two months of the year, accounting for 61.1 percent of total investment. Investment in the primary industry reached 233.5 billion yuan, up 19.8 percent; that in the secondary industry was 3.51 trillion yuan, up 4.2 percent, of which the figure for manufacturing was 2.93 trillion yuan, up 5.8 percent; the investment in the tertiary industry was 5.63 trillion yuan, up 12.2 percent, of which, that in infrastructure was 1.90 trillion yuan, a gain of 23.5 percent. Investment in the high-tech industry grew by 22.6 percent, 13.4 percentage points higher than the growth rate of total investment. Funds in place for investment in fixed assets were 10.61 trillion yuan, down 2.9 percent year-on-year, and 5.1 percentage points lower than the first two months. The total planned investment in newly projects was 6.20 trillion yuan, a year-on-year decrease of 6.5 percent. Investment in fixed assets (excluding rural households) in March witnessed a month-on-month growth rate of 0.87 percent.

In the first quarter, total investment in real estate development was 1.93 trillion yuan, up 9.1 percent year-on-year, 2.2 percentage points higher than last year, and 0.2 percentage point higher than the first two months of this year. Of the total, the investment in residential buildings went up by 11.2 percent. Floor space of houses under construction was 315.6 million square meters, up 11.6 percent year-on-year. Specifically, the floor space of residential buildings newly started increased by 18.1 percent. The floor space of commercial buildings sold reached 290.35 million square meters, up 19.5 percent; that that of residential buildings went up by 16.9 percent. The sales of commercial buildings amounted 2.32 trillion yuan, up 25.1 percent. Of this total, the sales of residential buildings grew by 20.2 percent. The land space purchased by real estate developers was 37.82 million square meters, up 5.7 percent year-on-year. At the end of March, the floor space of commercial buildings for sale was 688.1 million square meters, down by 17.45 million square meters compared with the end of February. Funds in place of real estate development enterprises were 3.57 trillion yuan, up 11.5 percent year-on-year.

5. Market sales were stable with online retail sales maintaining a relatively fast growth.

In the first quarter, the total retail sales of consumer goods reached 8.58 trillion yuan, a year-on-year increase of 10.0 percent, which was 0.4 percentage point lower than that of the previous year. Of that total, retail sales of units above designated size reached 3.75 trillion yuan, up by 7.9 percent. Analyzed by areas, retail sales in urban areas reached 7.34 trillion yuan, up 9.7 percent, and those in rural areas amounted to 1.24 trillion yuan, up 11.9 percent. Grouped by consumption patterns, the total income of the catering industry was 919.6 billion yuan, up 10.8 percent; and retail sales of goods were 7.66 trillion yuan, up by 9.9 percent. In particular, the sales of retail units above designated size amounted to 3.52 trillion yuan, up 7.9 percent. Upgraded consumer goods showed robust growth. The retail sales of cultural goods and office supplies grew by 14.8 percent, communications equipment by 11.0 percent, sports and recreational articles by 17.3 percent, furniture by 12.6 percent, and building and decoration materials by 14.8 percent. In March, the total retail sales of consumer goods achieved growth of 10.9 percent year-on-year, 1.4 percentage points higher than the first two months of the year, or up 0.84 percent month-on-month.

In the first quarter, online retail sales hit 1.40 trillion yuan, up 32.1 percent year-on-year. Of the total, the retail sales of physical goods were 1.07 trillion yuan, an increase of 25.8 percent, accounting for 12.4 percent of the total retail sales of consumer goods, or 1.8 percentage points higher than the same period of last year.

6. Imports and exports grew rapidly and structures of trade have been improved.

Imports and exports reached 6.20 trillion yuan in the first quarter this year, registering a yearly growth of 21.8 percent, while, the figure last year slid 0.9 percent. Specifically speaking, exports reached 3.33 trillion yuan, up 14.8 percent year on year, while, imports grew by 31.3 percent to 2.87 trillion yuan. The trade surplus was 454.9 billion yuan.

The general trade of imports and exports increased by 23.2 percent, making up 56.2 percent of the imports and exports combined while registering an increase of 0.6 percentage points. The exports of mechatronics which grew by 15.1 percent in the first quarter this year remained the major force which composed of 58.1 percent of the exports in aggregation.

The imports and exports to some targeted countries involved in the Belt and Road Initiative generated growths. The figures of China's trade to Russia, Pakistan, Poland, Kazakhstan and India rose respectively by 37 percent, 18.7 percent, 19 percent, 69.3 percent and 27.7 percent. The imports and exports in March grew by 24.2 percent year on year to 2.31 trillion yuan, among which, the exports reached 1.24 trillion yuan, up 22.3 percent, while, imports increased by 26.3 percent to 1.07 trillion yuan.

In the last quarter, the delivery value for exports from domestic industries and firms above designated size reached 2.79 trillion yuan, up 10.3 percent year on year, among which the figure in March alone rose by 12.9 percent to 1.07 trillion yuan.

7. The Consumer Price Index (CPI) registered moderate growth while the Producer Price Index (PPI) experienced a decelerated growing rate.

In the first three months of this year, the growth of the CPI dropped 0.7 percentage points year on year to 1.4 percent, constituted by 1.5-percent increase from cities and 1.1 percent in rural regions. In view of industrial categories, prices of foods, cigarettes and alcohols dropped by 0.8 percent year on year, the wears rose by 1.2 percent, accommodations up 2.4 percent, the daily necessities and services grew by 0.6 percent, traffic and telecommunication surged by 2.0 percent, education, culture and entertainment increased by 2.5 percent, medical and healthcare services hiked by 5.1 percent and the other services climbed by 3.6 percent.

Amid the prices of foods, cigarettes and alcohols, those of crops rose by 1.3 percent, pork, up 0.9 percent and fresh vegetables fell by 18.8 percent. In March, the CPI grew by 0.9 percent year on year, a growth 0.1 percentage points higher than that in February, however, 0.3 percent lower than that in February.

The cost price of PPI in the first quarter this year rose by 7.4 percent year on year, while, the figure last year was down by 4.8 percent. In March, the cost price of PPI rose by 7.6 percent, 0.2 percentage points lower than the growth rate in February, while 0.3 percent higher than the growth generated a month ahead. In the first quarter this year, the purchasing price of PPI soared by 9.4 percent, and in March alone, the figure grew by 10.0 percent year on year as well as up 0.5 percent from that of a month ago.

8. Personal income has improved with economic growth while the wealth gap between urban and rural incomes keeps narrowing.

In the first quarter of this year, the per capita disposable income reached 7,184 yuan, with a nominal growth of 8.5 percent and an actual growth of 7.0 percent regarding the factoring of price factors. Growth has become 0.1 percentage points higher than that of GDP. Being dissected in view of urban and rural locations, the disposable income per capita of urban residents reached 9,986 yuan, registering an actual growth of 6.3 percent regarding price factors, at the same time, the rural individuals were distributed with 3,880 yuan, an actual growth of 7.2 percent.

The ratio between urban and rural per capita disposable incomes has reduced to 2.57, 0.02 points lower year on year. The median of the disposable income per capita reached 6,067 yuan, registering a yearly nominal growth of 6.7 percent. The per capita consumption expenditure reached 4,796 yuan, nominally up 7.7 percent year on year and 6.2 percent de facto. By February, the outflow of rural labor force to cities had totaled to 172.53 million, with a 2.7-percent increase of 4.54 million people comparing to the same period, last year. The per capita income of the migrant workers reached 3,483 yuan, up 6.4 percent.

9. The supply-side reform forges ahead and the economic structure continues to be improved.

Progress has been made in an endeavor to reduce overcapacities, real estate inventories and debts while cutting costs and strengthening vulnerable points.

In the first quarter this year, the utilization ratio of industries above designated size reached 75.8 percent, 2.0 percentage points higher than that in the fourth quarter last year, while, the output of raw coals fell by 3.0 percent year on year.

By March, the commercial housing to be purchased slid by 6.4 percent, 3.2 percentage points more than the decline in the end of last year. The costs and debt asset ratio among industries and firms dropped. By February, the ratio of asset liabilities among the industries and firms above designated size reached 56.2 percent, down 0.6 percentage points year on year. Between January and February, the cost of the enterprises above designated size reached 84.91 yuan per 100 yuan in revenue, with a reduction of 0.28 yuan, year on year.

The investment grew faster in the vulnerable sectors and the capitals used for environmental and ecological protection, management of public facilities, agriculture and irrigation respectively increased by 48.1 percent, 27.4 percent, 24.6 percent and 18.3 percent, 38.9, 18.2, 15.4 and 9.1 percentage points higher than the total investment growth.

The industrial structures continued to be improved. The tertiary industry made up 56.5 percent of the GDP, 17.8 percentage points higher than the secondary industry. The change of demand pattern is underway. The eventual consumption expenditures contributed 77.2 percent to GDP growth in the first quarter this year. With the accelerating expansion of new energies, the added value of the emerging industries grew by 10.3 percent year on year, 3.5 percentage points higher than the industries above designated size, in the past three months. The energy consumption has continued to be reduced as the energy consumption per unit of GDP declined by 3.8 percent in the first quarter, this year.

Generally speaking, the national economy maintained good momentum in the first three months, this year, as the growth rate rebounded, the structural reform sustained, the innovative industries accelerated and livelihoods have been much improved. With the numerous positive factors, the economic operation enjoyed a good start. But what we still need to be aware of is the complicated international environment and the acute national structural problems that remain to be solved, which challenged us to be more dedicated to sustain the good momentum.

With our ensuing plans, we'll make progress while avoiding big volatility of the national economy, prioritizing the implementation of innovative approaches, pressing ahead with supply-side reforms, stimulating more demand, effectively rationalizing social expectations and putting innovation as an incentive to fuel development. Let's roll our sleeves and work hard to press ahead with a smooth development of a stable and healthy national economy. Thank you!

Xi Yanchun:

Thanks for Mr. Mao's introduction. Now it's time for questions. The rules remain unchanged as the journalists are required to identify yourself with your media outlets before raising questions. Now the question session begins.