China Central Television (CCTV) :

China's economy has stepped into a new normal since the 18th CPC National Congress. Mr. Ning briefed on the progress of the country's social and economic development over the past five years. Could you summarize the most important achievements China has made in regards to the economy over the past five years? Thank you.

Ning Jizhe:

I have just introduced China's achievements over the past five years from the perspective of the five development philosophies. To sum up, a prominent feature of China's economic development over the past five years is the new normal.

On the one hand, the new normal refers to the slowing of economic growth from the former high speed to the current medium-to-high speed. It's true that China's economic growth has slowed down a bit now, but the speed remains high in comparison with other countries. As I just introduced, China's economy grew at an average rate of 7.2 percent over the past four years, the highest growth rate among the world's major economies. As one of the world's biggest emerging economies, India registered a growth speed of around 7 percent in recent years, which fell below 6 percent in the first half of this year. China has an economy of US$11.2 trillion and still maintains a medium-to-high growth speed of around 7 percent, which is one of the important aspects of China's economy in the new normal.

The new normal refers to structural optimization on the other hand. With regard to the proportion of investment and consumption, consumption has become a major driving force of economic growth and its contribution has reached over 50 percent in recent years. Although investment still plays a key role in economic growth, consumption now plays a fundamental role in development and has become a major driving force. This is an aspect of structural optimization.

Ning Jizhe:

Regarding the industrial structure, the agricultural foundations have been improved and the manufacturing sectorhas been upgraded; meanwhile, the service industry has grown into the largest sector. In the past five years, the proportion of the service industry's added value in GDP has grown from less than to more than 50 percent. The figure was even higher in major cities like Beijing and Shanghai.

The upgrading of the manufacturing sector mainly occurred in the high-tech industries, strategic emerging industries and equipment production. Some of these industries have seen rapid growth at a rate near oreven above 10 percent. In the recent two years, some gained evengreater growth momentum. This indicates that new driving forces have rapidly developed, and the industrial sector has been further upgraded.

Regarding domestic and overseas demand, the former has assumed a major role in the Chinese economy. While the world economy has remained sluggish in recent years underthe lingering impact of the global financial crisis, the growth of the Chinese economy was propelled mainly by domestic demand.

Ning Jizhe:

The third characteristic of the new normal is the shift from the old economic driving forces to new ones. In recent years, investment in technological transformation in industrial and manufacturing sectors has grown faster than overall investment. This confirms that the technological transformation has been accelerating. It also reflects the way in which enterprises are working very hard to transform and upgrade in order to meet changing market demand and enhance their abilities to cope. The new driving forces are growing rapidly. These refer to new industries, new types of businesses, and new business models. New industries, or to be specific, the high-tech industry and strategic emerging industry, maintain rapid growth. Driven by the general public's growing entrepreneurship and innovative capacity, new industries continuously introduce new products and new services. New types of businesses, such as the sharing economy and online retail sales, are what the majority of the Chinese people are very concerned about, as well as what the people of the world feel about China's economic vitality. Many new types of businesses are growing vigorously with the promotion and application of the "Internet Plus" and high technology. New business models are emerging not only in individually-run businesses but also in large- and medium-sized enterprises. Take the Haier Group for example. One of its business models is to encourage its employees to use the internet as a platform to directly face customers and conduct production and operation based on consumption and usage requirements. This new business model is also growing rapidly.

Ning Jizhe:

The NBS made initial calculations of the new industries, new types of business and new business models. In 2015, the value added from these three aspects made up 14.8 percent of national GDP. The proportion was even higher in coastal areas, such as Shanghai, Shenzhen and Guangdong Province. In 2015, the national new economic momentum development index stood at 129 percent. We are now working on the statistics of 2016, and the general trend is even better than 2015.

So, no matter whether you look at it from the perspectives of speed, structural optimization or the transformation of the drivers of growth, you will find out that the new normal of China's economic development has more obvious characteristics that support economic development, create more jobs and income, and strengthen the nation's comprehensive power. Thank you.

CGTN:

We have noted the Chinese economy has faced both a complex external environment and internal conundrums since the 18th CPC National Congress. Yet, even in such circumstances, it has continued to make outstanding achievements. What do you think is the driving force behind this? Thank you.

Ning Jizhe:

Over the past five years, the splendid achievements of the Chinese economy amid the complicated context existing both at home and abroad owe much to the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core and the direction of the Party regarding economic and social development work. This is the most distinctive feature of the socialism with Chinese characteristics.

No matter what difficulties and problems occur, the CPC Central Committee and the State Council will forge ahead with timely study, inspecting conditions in the grass-root society and studying both the domestic and international situation, to ensure that wise decisions and concerted efforts are made nationwide to surmount obstacles. Thus, the national economy is enabled to maintain sound development and continue with structural transformation and upgrading, securing good results.

Second, specifically speaking, the new normal has been driven by the new development philosophy. In the past five years, while complying with the requirements of the CPC Central Committee and the State Council, the philosophy of innovative, coordinated, green, open and inclusive development has been adopted to ensure continued economic and social development. It is conducive to resolving problems and disputes, ensuring strong and sustainable development.

Ning Jizhe:

Third, we have pushed forward supply-side structural reform and moderately expanded aggregate demand. We have been promoting supply-side structural reform unswervingly. The excessive and outdated production capacity in some sectors and industries has restricted their growth and even affected the balance of supply and demand in the macro economy. Our focus on supply-side structural reform has not only changed the supply and demand of some specific industries, but also contributed to the balance of supply and demand in the whole economy. At the same time, China's domestic demand is still very large. Thus, improving the supply quality, adjusting the supply structure, and continuously expanding demand in consumption and investment have both maintained the balance of the macro economy and improved the structure of the economy.

Fourth, we have addressed the difficulties of development with reform and opening up. The central government offered guidance on the reform and made important decisions. The series of major reform measures have not only addressed some current contradictions hindering growth and development, but also opened up a path for further development of China's economy. In terms of opening up, peaceful development, mutual benefit and win-win results, especially the Belt and Road Initiative, have received unprecedented recognition and responses in the past few years from many countries around the world. Based on extensive consultation, joint contribution and shared benefits, we have pushed forward policy consultation, trade promotion, infrastructure connectivity, financial cooperation and people-to-people exchanges, and improved the international environment in which we develop. So these are primarily our major achievements over the past five years.

Reuters:

I want to ask a question about a perceived weakness in the economy, which is the performance of small and medium-sized firms. NBS statistics show small firms are contracting, while the big and ultra-large firms are getting stronger. The PBOC is also focused on helping small firms, which indicates they need more help, or they may face some problems. What is the cause of the weakness? Are you concerned that it indicates bigger problems in the economy as it moves forward? Are you comfortable with the big and ultra-large firms playing such an important role in economy? That's my first question.

My second question is: There have been signs that the GDP slowed a bit in August and September. How do you think the government should react if the growth proves to be slowing? It will face the choice between supporting growth and continuing to control credit. What choice will be made? Is the government comfortable with letting growth slowdown to below 6.5 percent, if that is necessary to control debt?

Ning Jizhe:

Medium and small-sized enterprises have their weak points; however, they also constitute an important part of the overall economy. Together with micro-sized enterprises, they make up over 90 percent of the market entities in the country, while large enterprises only account for less than 10 percent. Besides, medium and small-sized enterprises have made great contributions to the job market and national tax revenue.

The Chinese government attaches great importance to the development of medium and small-sized enterprises. Since the 18th CPC National Congress, a series of policies and measures were introduced to address their weak points and promote their further development. So far this year, the number of new businesses registered every day averaged about 16,000. In August, in particular, the number actually reached 17,000. More than 90 percent of these businesses are of medium or small size. This figure matches the proportion I just mentioned.

The growth momentum and potential of the national economy mainly comes from self-employed traders. Most of today's large enterprises and "unicorn" enterprises were medium and small-sized ones a few years ago.

SMEs had indeed experiencedsome difficulties in the early days of their establishment. To solve the problem, Premier Li Keqiang presided over a State Council executive meeting in September especially to study financial inclusion. Over the past one or two years, as required by the CPC Central Committee and the State Council, China's major banks have all set up a financial inclusion unit to facilitate financingfor SMEs and micro businessesas well as to cater to theneeds of agriculture, farmers and rural areas.

Just the other day, the central bank announced a targeted cut to thereserve requirement ratio to encourage financial inclusionin commercial banks. The cut will become effective fromJanuary 1, 2018. I believe by working hard and embracing innovation in addition to government support,SMEs can emerge as Unicorns and then blossom into dynamic, competitive big companies.

Ning Jizhe:

In the report on the work of the government, this year's GDP growth is expected to be around 6.5 percent. And in the first half of this year, China's GDP growth grew by 6.9 percent year on year.

For example, from January to August, the profits of industrial enterprises above the designated size increased by 21.6 percent, growing faster than last month, showing the effective management of enterprises.

The Purchasing Managers' Index this September is 52.4 percent, the highest since May, 2012. And the non-manufacturing business activity index is approaching 55.4 percent, also the highest since June, 2014. The nominal growth rate of industrial enterprises above the designated size will be higher than the actual growth if considering price factors.

For example, from January to June, the nominal growth rate of industrial enterprises in Inner Mongolia Autonomous Region stood at 20 percent, and the actual growth adjusted from price factors was about five percent, representing profound economic development.

So, a total GDP growth rate of 6.5 percent is expected to be realized. Besides GDP growth, employment, prices, environmental protection and other factors should also be considered. In recent years, the overall employment situation has remained positive. Prices are lower than expected, and the eco-environment is improving. So we are confident to realize the major goals of economic social development.

Bloomberg:

I have three questions. The first is about cutting overcapacity. What effects will shutting down polluting enterprises have on economic growth? For example, how many jobs will be lost and what kind of negative effect will this have on GDP growth? The second is about the accuracy of statistics. In March, President Xi Jinping was quoted as stressing that the accuracy of statistics must be ensured. What efforts has NBS made to improve the accuracy of statistics? The third question is about economic indicators. As you mentioned just now, innovation is an important growth driver, and such technology companies as Baidu and Alibaba are developing some of their own indicators to measure economic growth. How does NBS cooperate with these companies in using network data to measure economic growth? Thank you.

Ning Jizhe:

All the three questions you raise are very important. As to the first, goals were set in this year's government work report for cutting overcapacity in the steel, coal and thermal power sectors. All regions and all government departments are making efforts to promote progress with the expectation of reaching the desired goals. Through market- and law-based methods, overcapacity and outdated production facilities, including those violating the environmental laws, are being cut in all sectors in a steady manner. Since cutting overcapacity is among the priorities of economic growth this year, it was taken into consideration when the economic and social development targets were set. As I said just now, cutting overcapacity will not impede economic growth. Instead, it will improve the environment of the market economy and the ecological environment related to people's wellbeing.

During the process of cutting overcapacity, people from certain sectors are faced with difficulties gaining reemployment. The CPC Central Committee and the State Council have attached great importance to the issue and the financial sector has provided subsidies. As we know, most enterprises have performed flexibly in staff resettlement, such as those in steel, services, research and development, circulation and sales industries. In Hebei Province, some workers from steel enterprises have been smoothly transferred to the service departments in the same enterprise. In addition, newly emerged innovative enterprises have also accepted a large number of workers.

Therefore, the unemployment rate data was collected using sampling methods rather than summary statistics. The data shows that in 2016 and 2017, even while the efforts to cut overcapacity were increasing, the unemployment rate still fluctuated around five percent. The number was higher when in graduation periods.

With the further development of mass entrepreneurship and innovation, there will be more opportunities of employment. More than one million people were reemployed last year and it will be better this year.

Ning Jizhe:

The second question is how the National Bureau of Statistics (NBS) improves the quality and the authenticity of the data. We have adopted a series of measures to improve the authenticity of the data and to avoid fake date in individual units and areas. We have preliminarily established responsibility and accountability systems to ensure data quality. Heads of local statistics bureaus and even local governments will be responsible for the problematic data.

We have also increased our efforts on law enforcement supervision. From Aug. 1, 2017, rules for the implementation of the statistics law (revised in 2009) came into force. The NBS at the same time has set up a special bureau for law enforcement supervision. We have zero tolerance for false data or statistical fraud, which is necessary to change the overall environment for economic and social development.

Meanwhile, we will make the statistical data more scientific. With economic and social development, many new phenomena emerge, so we want to make them understood. However, there are still some statistical data that we can't easily collect. It's related to your question. We will lose no time in establishing sound statistics for new driving forces and new industries with internet-based thinking, big data and cloud computing technology. This is also one of the important aspects of improving the quality of statistical data.

It relates to your third question. We have made it clear in researching statistics for the 13th Five-Year Plan that we intend to establish a statistical cloud, that is, to apply the internet, cloud computing and big data to statistics. We are making efforts and orderly progress in this regard. Some big internet companies have accumulated a lot of statistical data during their operation, and so have government departments. As required by the State Council, statistical data made by different departments will be shared among them and will be open to the public in accordance with the requirements of openness in government affairs. We have been promoting it fully and without exception. The National Bureau of Statistics is making more efforts in data openness and sharing. Just as we have mentioned, Alibaba as well as Inspur from Shandong Province have established a mechanism of cooperative research.

Since 2013, the National Bureau of Statistics has established a relationship of cooperative research with these enterprises to explore how to make statistical data truer, more accurate, more integrated and more up to date with the internet, cloud computing and big data. Efforts have been made in this respect. As for the development index just mentioned, some enterprises, colleges and universities have also established an index that reflects new economic development. I just introduced the new driving force index of economic growth issued by the National Bureau of Statistics. We are cooperating with some colleges and universities to look into the development of China's new industries, new commercial activities and new business models from multiple perspectives. Thank you.

China National Radio (CNR):

Employment is the foundation to people's livelihood. Since the 18th CPC National Congress, the job market has faced many challenges, such as a record number of college graduates and the resettlement of a large number of workers from industries needing to cut over-capacity. The employment pressure is considerable, and we also note the macroscopic employment figures in the just-released document. So, how do you evaluate the employment performance in the past five years? And how do you assess the employment situation in the next few years? Thank you.

Ning Jizhe:

Employment is not only an important indicator of people's livelihood, but also an important indicator of the macro economy. We develop the economy and promote production with the aim of creating more jobs, increasing incomes, improving consumption and promoting social well-being. So, employment is a most important indicator. At present, there are three main indicators we need to consider.

First, is the number of newly-employed in urban areas. From 2013 to 2016, the number of newly-employed was over 13 million annually for four years in a row. We have achieved all the annual goals previously set, which were 9 million to 10 million and then to 11 million this year.

Second, is the unemployment rate in urban areas. Jobless residents need to register with the labor departments of local governments or grass-roots units in urban areas. The unemployment rate has dropped from around 4.1 percent to less than 4 percent this year.

Third, is the surveyed unemployment rate implemented by the National Bureau of Statistics (NBS) on a trial basis in line with international practice. The surveyed unemployment rate was obtained by means of sample surveys rather than from the aggregated data of each unit. According to the present system, the NBS changes a certain percentage of samples every month to ensure that the figures obtained conform to the statistical principles of sampling. The obtained figures are also consistent with those applied in Europe and in the developed countries in the rest of the world.

Ning Jizhe:

These three indexes show that despite substantial employment pressure in the past few years, Chinese government at all levels, under the leadership of the CPC Central Committee and the State Council, put employment as the top priority, carried out employment-first strategies, made appropriate employment plans and policies, and especially, took a series of policies and measures to promote the employment and entrepreneurship of university students. Now, as seen from the employment rate of university graduates monitored by the Ministry of Education, these moves have proven to be very productive and addressed the employment pressure quite properly. One of the important reasons for this resides in the policies and measures of entrepreneurship and innovation, since the young generation cherish their strong passion to start their own businesses. Four years ago, the proportion of self-employment was only about 1 percent. Now, this index has reached more than 10 percent in some sectors. Despite still being a little bit lower than that of the United States, it represents a very promising prospect for the future. The awareness of entrepreneurship and innovation in Chinese youth is becoming even stronger now, and society has also provided a favorable environment, including support for small and micro businesses, all of which are conducive to employment. I believe that the employment of university graduates will increase in the next few years, and we remain optimistic about the trend of employment. Certainly the most important factor behind this is that the medium and long-term development of China's economic fundamentals does not change, and the economic growth and increasing production provide an important foundation for the increase of employment. With all the above factors combined, the problems in China's employment can be addressed completely. Thank you.

BTV:

My question is about the real estate market. In late 2016,at theCentral Economic Work Conference, it was noted that a house was for people to live in, and not for speculation. A series of policies were issued to control the real estate market. Recently, a special housing program for "new Beijingers" was launched. The program called for allocating over 50 percent of housing to these new residents of the capital. Would you like to comment on the achievements made in reducing the number of unsold homes, and the significance of these policies in developinga future real estate market? Thanks.

Ning Jizhe:

We will continue to cut excess inventory by implementing policies tailored to local conditions, in a bid to control the real estate market, which has continued to develop since the 18th CPC National Congress. In recent years, the property markets in different regions have shown signs of divergence. In the first-tier, and some second-tier cities, house prices grew rapidly, which was due to many factors, such as limited land, concentrated population and irrational investment. However, in third-tier and fourth-tier cities, unsold houses grew to a considerable number.We have been pushing ahead with supply-side structural reform, including cutting excess inventory. Therefore, to deal with the divergent prospects I mentioned, governmental measures suiting local conditions were adopted. You mentioned the special program launched in Beijing. It is designed to provide more homes with joint property rights between the government and occupiers in both Beijing and Shanghai to bring down prices and meet the needs of local people. In the third-tier and fourth-tier real estate markets, policies were introduced to reduce the number of unsold houses. For example, in rebuilding rundown urban areas, we put forward the policies of medium or small sized, medium-low priced housing. The government will continue to take measures to control the real estate market. And I believe these policies will play an important role in developing the long-term mechanism to regulate the market.

Hu Kaihong:

The last question.

Beijing Review:

Since the 18th CPC National Congress, China has made significant progress in green development. So, do we have any plans to extend the scope of the exchanges and cooperation regarding green development with the countries involved in the Belt and Road Initiative?

Ning Jizhe:

Green development is one of the key sectors in our new development concept. Since we are all living on one globe, it is a common cause to protect the planet for all humanity. As one of the world's major economies, China has increased its communications with other countries to share the endeavor of environmental protection, pollution control and the mitigation of climate change while pressing ahead with domestic green development.

The consensus of the policies among the countries involved in the Belt and Road Initiative, exemplified by the concerted efforts under the general plan of the Initiative and the individual country's own top-level programs, should all be guided by the fundamental principle of green development. As long as China and its partners achieve a production capacity to meet the world's green standards, they can truly secure win-win, reciprocal and mutually-beneficial cooperation.

In regard to international exchanges, it is being strongly stressed that China's backward production capacities should only be dissolved within China's territory. At the same time, overseas waste products should by no means reach China to threaten its soil and water.

All of our railways and equipment manufacturers operating in foreign countries are conforming to environmental criteria. It is undoubtedly a consensus that has been reached worldwide and a faith we have constantly upheld.

During their visits overseas, our state leaders have always stressed the importance of the social obligations when holding meetings with the Chinese enterprises investing in other countries.

One of the paramount social obligations is to follow local laws and regulations, especially operating and acting on local green standards. Despite the diverse environmental protection standards, the Chinese enterprises, wherever they are, are required to conduct their economic operations in line with local environmental requirements.

Hu Kaihong:

Today's press conference concludes here. Thanks to Mr. Ning. Thank you everyone.