CCTV:
Mr. Ning has presented in his speech just now that the economy maintained a steady growth in 2018, while we previously heard the central government used expressions like "worrisome developments amid generally steady economic operation" when analyzing the economic situation. Mr. Ning, can you please share with us your views on this expression? What do the "developments" refer to? Where do such worries come from? Which direction is the economy heading? Thank you.
Ning Jizhe:
In 2018, against the backdrop of a complicated international and domestic environment, China's national economy maintained stable and sound development momentum. The main expected goals of economic and social development were achieved, summed up in the following six aspects:
First, the economic operation was kept within a reasonable range, with the macro-control objectives all achieved. The economy maintained medium-to-high-speed growth, with total economic output reaching a new level. GDP grew by 6.6 percent over the previous year, achieving the growth target of around 6.5 percent. The growth rate ranked first among the world's top five economies. China is the largest contributor to world economic growth at nearly 30 percent. In 2018, GDP exceeded 90 trillion yuan, an increase of nearly 8 trillion yuan over the previous year. Converted using an average exchange rate, total economic output reached US$13.6 trillion, second in the world.
Price increases proved to be lower than expected, with a moderate rise in consumer prices. The CPI rose by 2.1 percent from the previous year, lower than the approximate 3 percent that had been expected.
Urban employment continued to expand, and new employment increased substantially. In 2018, the number of new urban jobs stood at 13.61 million; the urban surveyed unemployment rate remained at around 5 percent for the whole year and, in fact, was less than 5 percent in the later months of the year, achieving the target of keeping the figure below 5.5 percent that had been proposed in early 2018. Imports and exports maintained stable growth momentum, with a basic balance being achieved in international payments. For the first time, the total volume of imports and exports exceeded 30 trillion yuan, and the scale of trade in goods reached a new high, ranking first in the world. The trade structure continued to be optimized, the proportion of general trade imports and exports increased, the proportion of exports of mechanical and electrical products increased, and the foreign exchange reserves remained above US$3 trillion. The RMB exchange rate was basically stable.
Second, the three tough battles got off to a good start, and identified weak links significantly strengthened. The macro leverage ratio began to stabilize. In 2018, M2 growth was lower than nominal GDP growth. The ratio of M2 to GDP was 202.9 percent, down 3 percentage points from the previous year. At the end of November 2018, the local government debt balance was 18.29 trillion yuan, falling within designated limits approved by the National People's Congress.
We made notable progress in poverty alleviation. In 2018, the number of rural poor population in the country was reduced by more than 10 million, and 2.8 million people were relocated due to poor local conditions. We estimate about 280 poverty-stricken counties overall will have escaped from poverty.
We also made positive progress in energy conservation, emission reduction and pollution prevention and control. The energy consumption intensity continued to decline. The energy consumption for every 10,000 yuan of GDP fell by 3.1 percent year-over-year, and the proportion of clean energy consumption increased. 338 major Chinese cities saw 79.3 percent of days with fairly good air quality in 2018, 1.3 percentage points higher than 2017. The density of PM2.5 particulate matter was 39 micrograms per cubic meter last year, a decrease of 9.3 percent.
Third, supply-side structural reform further advanced. The task of reducing excessive capacity was completed ahead of schedule. We have been adhering to the market-oriented and law-based approach to reduce excessive capacity, leading to over fulfillment in the targeted reduction of steel production capacity by more than 30 million metric tons, and the removal of the coal production capacity by more than 150 million metric tons.
Deleveraging was steadily promoted, and the macro leverage ratio remained stable. The micro leverage ratio, measured by the asset-liability ratio of industrial enterprises above designated size, was down 0.4 percentage point year-over-year at the end of November 2018.
The drive for destocking proved effective. At the end of 2018, the areas of commercial housing for sale fell by 65.1 million square meters from the end of the previous year. In the past two years, a total of 180 million square meters of commercial housing stock has been cut.
Cost reduction continued to be effective. Costs in every 100 yuan of income earned from the main business of industrial enterprises above designated size continued to decline. The total scale of national enterprises and individuals' burden reduction exceeded the estimated 1.1 trillion yuan at the beginning of the year, and now it has reached more than 1.3 trillion yuan.
Much work was also undertaken to bolster weak spots. Investments in eco-environment protection, agriculture and social sectors saw accelerated growth.
The overall profitability of enterprises was on the rise. From January to November, the total profit of industrial enterprises above designated size increased by 11.8 percent year-over-year.
Fourth, the economic structure is being adjusted and optimized as the new driving force for development becomes stronger. First, the structure of demand was adjusted and optimized, and the proportion between investment and consumption witnessed rational changes. People care about consumption's contribution rate to economic growth, which was 76.2 percent last year, 18.6 percentage points higher than the previous year and 43.8 percentage points higher than the gross capital formation. The internal structure of investment is also being optimized. Private investment and investment in manufacturing both increased rapidly. Second, the industrial structure was continually upgraded, and the service industries assumed the role of "stabilizer." In terms of gross volume, the tertiary industry accounts for 52.2 percent of GDP. In terms of increment, the tertiary industry's growth is 1.8 percentage points higher than that of the secondary industry. In terms of internal structure, the industries' evolution to medium- and higher-end took speed. The value added of the high-tech industries last year increased 11.7 percent year over year, accounting for 13.9 percent of that of the industrial enterprises above a designated scale. And the share is even higher in some coastal regions. The value added of equipment manufacturing industries was faster than the growth of industries of the enterprises above a designated scale. As for agriculture, the plantation structure was optimized and adjusted, and the output of grains remained generally stable. Third, emerging industries, new products, new commercial activities and new modes continuously grew up. The emerging manufacturing industries of strategic importance and the merging service industries of strategic importance have kept comparatively fast growth. The outputs of new energy vehicles, optical fiber and smart television have increased by a large margin. The online retail sales volume has increased by more than 20 percent. Fourth, important science and technology achievements are available. The Beidou 3 satellite was successfully deployed and came into operation; the first earthquake monitoring satellite was launched; the Hong Kong-Zhuhai-Macao Bridge opened to traffic last year. Science and technology are increasingly fueling development. Earlier this year, the Chang'e 4 probe landed successfully on the far side of the moon.
Fifth, reform was deepened and opening-up was expanded, injecting new vitality into development. First, in some key fields, reforms were carried out at a deeper level. The reforms -- featuring streamlining governance and delegating power, integrating power delegation and strengthening management, and optimizing services — have yielded obvious effects. According to the World Bank's Doing Business Report 2018, China's ranking has soared 32 places from last year among 190 economies. Second, the number of market subjects increased by a large margin. Last year, the number of newly registered enterprises nationwide was up 10.3 percent year over year, and about 18,400 enterprises were registered each day on average. The National Bureau of Statistics has finished the fourth national economic census, and is now engaged in a household survey. The results of the survey indicate that the number and vitality of legal entities and industrial unity are higher than expected. Third, the finance and taxation system reform unfolded nationwide. The reforms of state-owned enterprises and state-owned assets, price reform, and reform of investment administrative mechanisms were carried forward steadily. The property ownership protection system was constantly improved. The opening-up level was continuously enhanced. The momentum of attracting foreign investment was good. Against the backdrop of the notable decline of global cross-border investment, China used $135 billion last year, up 3 percent year over year. The investment used by manufacturing industries increased by 20 percent, accounting for 30 percent of overall growth. China's foreign investment grew continuously; its economic and trade exchanges with countries along the routes of the Belt and Road were expanded. Its import and export volume with these countries, and its nonfinancial investment in these countries, both grew faster than the overall growth of imports and exports and overall foreign-bound investment.
Sixth, residents' income and spending increased rapidly, and people's livelihood steadily improved. First, residents' income grew on pace with the economy. Last year, national per capita disposable income grew 6.5 percent, higher than the 6.1 percent growth of GDP. Rural residents' income grew faster than that of their urban counterparts. According to the National Bureau of Statistics, the middle-income population in China has exceeded 400 million. Since the 18th National Congress of the Communist Party of China in 2012, the scale of the middle-income group has continuously expanded. Second, residents' spending grew quickly. Last year, the personal expenditure grew 6.2 percent, 0.8 percentage points higher than the previous year. The actual growth of the rural residents' personal consumption was 8.4 percent, faster than that of urban residents. Third, the structure of consumption was constantly upgraded. Last year, the Engel Coefficient of the national residents was 28.4 percent, down 0.9 percentage points from the previous year. The standard of the OECD countries, or developed economies, was below 30 percent. We reached the level in terms of the Engel Coefficient. Service consumption continuously improved as well. Last year, the number of domestic tourists and the revenue from domestic tourism both grew by more than 10 percent, and total box office revenue of the film industry reached 60 billion yuan, up nearly 10 percent.
At the same time, the economic performance, amid overall stability, presents aspects that arouse people's concern. The major reason firstly stems from the external environment. We are all very concerned about the way the international situation is trending, full of variable and uncertain factors. The past year witnessed ups and downs in the world economy, such as the financial market and prices of large quantities of commodities fluctuating sharply, along with a drastic fall in global investment and the prevalence of global trade protectionism and unilateralism. All these developments in the international situation impacted on China – the second largest economy in the world with its import and export volumes accounting for one-third of total GDP.
Other factors came from internal environment. Structural issues piling up over a long period are still the main aspect of all contradictions in China's development. Currently the economy is in a transition stage, during which the throes of the reform process are unavoidable, with a constantly changing situation. There are inevitably various contradictions, challenges and difficulties in such a transition period. In particular, the economy faces significant downward pressures. It should be noted that the economic growth rate dropped slightly, as was expected, of course.
Overall, in such a complex internal and external environment, it is not easy for the economy to perform within a reasonable range. Achievements have not come easily; hence, we will attach greater importance to the various problems.
Bloomberg:
I have two questions. First, in terms of the "worrisome developments" mentioned just now, what were the sources of these worries? How much came from the trade war with the U.S.? Second, it was just mentioned that the unemployment rate was 4.9 percent at the end of last year. We have read many media reports on large-scale dismissals before the New Year like those of Foxconn. The National Development and Reform Commission attributed it to migrant workers' earlier return home for the Spring Festival. Can the unemployment rate of 4.9 percent accurately describe China's situation? Thank you.
Ning Jizhe:
On your first question, how much of the worry stems from China-U.S. trade friction? This began to emerge from the second quarter of last year. In these circumstances, the Chinese government promptly adopted a policy of stabilizing employment, finance, foreign trade, foreign capital, investment and expectations. The trade friction does affect China's economic operation, but the effect is controllable overall. The data on imports and exports released some days ago also demonstrated this point, and judging from the data on China's economic performance, it is generally believed the international situation had a greater impact on China's economy in the fourth quarter. Here, I would like to share the data in December with you again.
In the past two months, some major economic indicators have risen while others have fallen, but the economy still registered a slower, but stable performance. For example, in December, major indicators on investment, consumption, performance of the industrial and service sectors were either flat or slightly up, but generally stable. Fixed asset investment from January to December rose 5.9 percent year over year. In December, retail sales of consumer goods rose 8.2 percent year over year, 0.1 percentage point higher than the growth rate in November. The added value of industrial enterprises with an annual revenue of 20 million yuan or more derived from their main business operations increased 5.7 percent year over year, 0.3 percentage point higher than that in November. The Index for Service Industry Production rose 7.3 percent year over year, 0.1 percentage point faster than November. Despite the decline of the Purchase Management Index of the manufacturing industry, the Index for Non-manufacturing Industry Business Activity increased, the service sector maintained its boom, and the Index for the Construction Industry rose sharply.
Trade friction affects not only the economies of China and the U.S., but also the global economy. In general, we are overcoming it and moving forward. Cooperation brings benefits for both countries, while confrontation brings mutual suffering. Cooperation brings gains to all countries, while confrontation brings losses to many. Working groups of the two countries maintained close communication and conducted many talks to implement the outcome of the meeting in Argentina on Dec.1 of their leaders, and achieved positive progress. It was important news for both countries and the global economy in general. I have personally noticed that the stock market or the tweets from the other side of the ocean had some positive effects on the talks. Economic globalization remains a long-term trend, and the Chinese economy is now deeply integrated into the world economy. The trade in goods between China and the U.S. exceeds US$ 630 billion. Mutually-beneficial win-win cooperation remains unchanged, and there is huge demand and potential for cooperation. Meanwhile, it should be noted that, in general, China's economic growth is led by domestic demand. In 2018, the contribution rate of consumption growth and investment growth combined surpassed 100 percent, while that of net exports was negative. Moreover, there is plenty of room for expansion in China's domestic market. Trade friction has not changed, and will not change the fundamentals of China's economic development. The country's resilience in withstanding pressure and coping with shocks, and China's overall economic growth amid stability, will remain unchanged.
Your second question is about the unemployment rate. We used the registered urban unemployment rate based on registrations with the labor authority; however, the National Bureau of Statistics began to release the surveyed urban unemployment rate last year. The latter had already been trialed internally for five years, and is considered more representative, as its system, approach and sample distribution all conform to the standards of International Labor Organization (ILO). As the ILO was most influenced by Europe, we adopted the same system and approach of surveyed unemployment rate as the European countries. In comparison, the statistical scope of the U.S. might be narrower. China's surveyed urban unemployment rate was 4.9 percent in December, while that of the U.S. was 3.9 percent. The annualized growth rate of the U.S. economy in the third quarter was 3.4 percent, while China's economy grew 6.6 percent in 2018. The surveyed unemployment rate in European countries was around 8 percent on average, but in some of the countries the figure was above 10 percent; the economic growth rate was around 2 percent. Japan's economy grew about 1 percent. Due to a labor shortage, Japan's surveyed unemployment rate was the lowest among major developed economies. The whole picture becomes clear by making a comparison of the surveyed unemployment rates of countries around the world.
There are individual cases like the one that just mentioned; in the meantime, new companies, including those worth tens of billions of yuan, are entering China, in both the service and manufacturing sectors. It is normal for foreign investment to come and go. Multinational enterprises are making readjustments globally, creating transfer employment and re-employment of some workers. Meanwhile, there is a shortage of technicians, skilled workers, and new-type talents in some companies in the coastal areas and in central and western China. Therefore, there is still a significant structural contradiction in employment. We will pay attention to the phenomena you just mentioned, promote implementation of policies giving priority to employment, so that people have jobs and lead an increasingly better-off life. Thank you for your questions.
China News Service:
According to the general market forecast, the external environment will possibly be more challenging in 2019, and several international institutions have downgraded their expectations on China's economic growth. Therefore, Mr. Ning, what will be the economic trajectory in 2019, and is it possible there will be a crescendo by the end of the year following moderating or even slow growth at the beginning?
Ning Jizhe:
The economic future of China and, indeed, the world, has drawn immense concern since 2019 arrived. Certainly, we have noted the fact of international institutions lowering their expectations for the global economy, including China as well as developed countries.
Regarding China's economy, the external environment is becoming more complex and challenging, filled with instabilities and uncertainties. Trade protectionism is still prevailing, along with unilateral protectionism and populism. More to the point, the structural problems are still prominent. However, despite various disputes, troubles, problems, challenges and even outright crises, there remain hope, opportunities and the conviction of a bright future. In 2019, we have got to be aware that opportunities form a symbiosis with challenges, especially as the economy is still forging ahead with moderate growth. Therefore, given its fundamental nature and conditions, we are convinced the economy can still perform within a reasonable range to secure constant and sound development. Amid a flagging global economy, China remains the biggest contributor to economic growth. Therefore, the fluctuations, either monthly or quarterly, are nothing abnormal and we should not be overly concerned. Our attention should be focused on key factors, such as yearly performance, the movement and tendencies in the global tide. On the whole, the world is still dominated by economic globalization, digitalized social networks, multilateral politics and cultural diversity. We have reached consensus that multilateralism, peace, development and cooperation remain mainstream conceptions globally.
As for China, the country is still and will continue to be in an important period of strategic opportunity for development. The economic fundamentals sustaining sound development remain unchanged, and will never change. The fact that China remains in the primary stage of socialism has not changed, and its international status as the largest developing country in the world is also, by no means, going to change. This means we still have an advantage of backwardness and substantial potential. In particular, the 19th National Congress of the Communist Party of China made a major decision to resolve the issue of imbalanced and inadequate development. The decision will certainly promote the country's high-quality development and ensure the economy maintains a medium-high growth rate.
There are many favorable conditions. First, tremendous changes in the world and a new development pattern emerging in China have brought about significant opportunities. There is enormous space for China to enhance openness towards and cooperation with other countries, and to participate in the reform of the global economic governance system. Meanwhile, we are speeding up economic structural upgrading, improving technological and innovation capacities, furthering reforms and opening wider to the outside world, as well as accelerating green development. All those efforts mean fresh development opportunities.
Second, China is among the most promising markets in the world. As was mentioned just now, our population is approaching 1.4 billion. China has the world's largest and fastest-growing middle-income population. According to internal measurement by the NBS, China had more than 400 million middle-income earners in 2017, and the measurement for 2018 is expected to see a higher number. There is a standard for the middle-income group. China has about 140 million households with an annual income of 100,000 to 500,000 yuan. Those 400 million people can afford cars, housing, tourism and entertainment. Therefore, consumption offers strong support for China's sustained and steady economic growth. Apart from the 400 million middle-income group, we have a large number of people in other income groups, including the high-income and the lower-middle-income. By increasing residents' income, improving the consumption environment and product quality, China is going to create a stronger domestic market and further unlock the huge consumption potential.
Third, China boasts substantial material and talent bases. After more than four decades of reform and opening up, China has established a relatively complete and comprehensive industrial system, and has been constantly improving its infrastructure, thus laying a sound material and technological foundation for economic growth. A great deal of attention is now being paid to labor, an active factor of production. China has a labor force of nearly 900 million, of which 700 million are employed people and 170 million are high-quality talents who have received higher or vocational education. More than 8 million students graduate from universities each year. With a huge population and labor force, China will continue to benefit from the demographic dividend, a rising labor participation rate and the emerging talent dividend. All those factors provide intellectual support for promoting high-quality development and opening up new growth horizons.
Fourth, the release of the reform dividend accelerated. Last year marked the 40th anniversary of reform and opening up policy; this year sees the 70th anniversary of the founding of New China. Thus, the reform was, is and will continue to be a strong driving force for China's economic development.
Fifth, macro policy has large room for maneuver and gained sufficient experience. At present, the inflation level and fiscal deficit rate are relatively low even by international standards, the foreign exchange reserves are sufficient, and macroeconomic policy has great room for a continued good operation. In this regard, we should strengthen countercyclical adjustment and implement active fiscal policies and prudent monetary policies. Active fiscal policies should be strengthened to achieve greater effect, and sound monetary policies should be maintained at a certain moderate level, coordinated with the implementation of other policies. We have enough adjustment tools and available approaches, and we have a wealth of experience. You can look back at how we responded to the Asian financial crisis 20 years ago. You can also look back at how we responded to the international financial crisis 10 years ago. Despite the challenges and changes taking place in the world, we have hard-working and intelligent people, we have strong leaders, and we have rich and diverse experience, so we will be able to turn crises into opportunities, seize opportunities, overcome challenges, reverse downward pressure to lifting force, promote economic to advance in stability, and strive for high-quality development.
CGTN:
We noticed a steady increase of consumption in 2018. However, there are concerns about consumption downgrade. What are your thought on this matter? We also noticed the newly released data showing that consumption fell from 78 percent of GDP growth in the first three quarters to 76.2 percent. What's your understanding of this fluctuation?
Ning Jizhe:
The contribution rate of consumption to economic growth in 2018 is higher than the previous year. The slight decrease you mentioned does not reveal anything serious. Generally speaking, the consumption structure is upgrading as people's income raises. Our Engel's Coefficient has been decreasing in recent years, which means people's non-material expenditure has been rising. And we all know that the data on people's income and expenditure are acquired through household surveys, in which electronic accounting is promoted. About 60 percent of those surveyed now use electronic accounting which is internationally comparable.
Another important point is that high-quality consumption is trending. Cheap and fine goods have a market, but the ones of higher quality and higher price are being embraced by the middle- and upper-income families. I think we all have an impression that the rate of service consumption is rising. Domestic tourists are increasing at double-digit growth, and a huge number of tourists are making overseas trips. Globalization comes with a spillover effect in consumption, which will be good for other countries. We also see rapid growth in consumption of culture, information, education and training, and health.
So far there is no effective method of measurement in this regard, and following the instruction of the State Council, the National Bureau of Statistics is trying to expand the total retail sales of consumer goods to cover service consumption. Service consumption in the fields of tourism, culture and health haven't been included in the total retail sales of consumer goods. But we still see a 9 percent increase, which is worth noting. Shifting from high-speed growth to medium-to-high-speed growth, we need to upgrade our thought patterns to realize a reasonable economic performance and achieve high-quality growth. To embrace the upgrading of consumption, we will improve our production structure, adjust our industrial and investment structures, and boost our consumption infrastructure. We will work hard to facilitate consumption's fundamental role in economic development.
Thank you.
Market News International:
Last year's market price was lower than expected and the CPI (consumer price index) as well as the PPI (producer price index) were also weakening in December. How do you expect the CPI and PPI will go this year? What are the risks of deflation? You said the country should enhance through counter-cyclical adjustments to its macro policies, could you discuss some of the factors in macro policies that are worthy of attention?
Ning Jizhe:
The CPI growth last December was below 2 percent and the PPI growth also fell month over month. Last year, the CPI and PPI grew moderately at 2.1 percent and 3.5 percent respectively, which was as expected by the Chinese people. There are many factors affecting CPI growth, the most important of which is the relationship between supply and demand, including that of manufactured consumer goods and agricultural products. We have sufficient and diversified supply of agricultural products, stable grain output, and a portfolio of business models. The supply and demand of manufactured consumer goods is generally stable, with the supply of most of the goods being higher than demand. Now manufacturing needs to improve standards and quality for higher consumption demand. The relationship between supply and demand influences pricing. We can analyze these two in relationship with each other to grasp the trend of price changes. Of course, PPI is not only affected by domestic supply and demand but also by the changes in the price of global commodities. Domestically, supply-side structural reform helped to solve the troubles of traditional industries like excess production and subsequently low prices. Internationally, the drop in global commodity prices, especially of energy products, in Q4 also affected PPI growth, as China is already a key importer and exporter of capital goods. There are still some uncertainties ahead in 2019. Macro-economic research as well as research on market prices, should take domestic and international factors into account.
As for the potential "deflation" risk of some media concern, China has not seen overall deflation in the past 10 years, but there were some kinds of structural deflation factors in certain years. It is inappropriate to say that China faces the risk of deflation this year. Given the economic climate and other background factors, we expect that prices will see a moderate rise this year. Pricing changes are affected by the relationship between market supply and demand, and this leads to your second question on counter-cyclical adjustments to macro policies. Macro policies should not only deal with structural problems, key problems and key elements, but also take the balance of supply and demand into consideration. Counter-cyclical adjustments help reduce downward pressure of economic growth, while supply-side structural reform helps improve the relationship between supply and demand, as well as promote overcapacity reduction and structural deleveraging. At the same time, we should take stable overall demand into consideration. The government policy is very clear now that it will implement a proactive fiscal policy and prudent monetary policy. The proactive fiscal policy is to increase efficiency through bolder and more effective measures while the prudent monetary policy is to be "neither too tight nor too loose." The former involves cutting taxes and fees on a larger scale, substantially increasing the issuance of special-purpose local government bonds, and raising investment within the central government budget to channel more energy into weaker areas. Moreover, the finance department has made arrangements to improve efficiency in asset allocation and to enhance performance. The monetary policy should be "prudent," which implies that it should be "neither too tight nor too loose," and should maintain market liquidity at a reasonably ample level; keep proper increases for the scale of currency, credit and social financing; improve financing and credit structures by following the requirements of deepening supply-side structural reform; increase financial support for private enterprises; and smooth out the monetary policy transmission mechanism to increase direct financing to the brick-and-mortar businesses and small- and medium-sized enterprises, for the purpose of better serving the real economy. Therefore, the policy orientation is very clear.
Thank you.
Phoenix TV:
Our question concerns the total population. The number of births has been shrinking for the second consecutive year, with the birth rate and the natural population growth rate reaching new lows. What do you think of this situation? Does the gradual decline in population growth rate mean the demographic dividend of China's economic growth is disappearing ahead of schedule?
Ning Jizhe:
Recently, people are very concerned about the population data. Some research articles suggest the population will see so-called negative growth. The data released by the National Bureau of Statistics (NBS) has clearly shown that, in 2018, China's population is not only growing, but also the number of births, 15.23 million, is relatively large. This figure is still very impressive. As for the decline in the population growth rate and birth rate, you mustn't concentrate on the one-year data. We need to undertake long-term observation on this point. We have had population peaks in our history, and, now, the structural changes in population occur naturally; so, we shouldn't over-interpret it.
The demographic structure changes with economic and social development. As mentioned earlier, the demographic dividend still exists. China has labor resources of nearly 900 million people. This scale is huge, despite some fluctuations. The labor participation rate is not low in global terms. More than 700 million out of 900 million people are employed, and there is still room for growth. The quantity of labor itself presents a great potential. Everyone notices that there are still 288 million migrant workers, which is a very large pool of available labor. Although the population who reside in areas other than that of their household registration has declined, the number is still very large. The reason for the decline is that 100 million workers have been employed in cities, being transformed from farmers into urban residents. Now, with the development of the central and western regions, foreign companies and domestic companies in coastal areas have invested more there. With the improvement of transportation and infrastructure in these areas, and the implementation of various regional development strategies, migrant workers have returned to their hometowns, many finding jobs in secondary and tertiary industries nearby, creating a new trend. The quality of the labor force is improving constantly; coupled with the fact appearance of eight million college graduates each year, their contribution to industrial upgrading and talent bonuses will become even more prominent. We attach more importance to the talent bonus, and, along with the fact that China still has a demographic dividend, it can be said that the factors supporting the medium and long-term positive trend of the national economy have not changed.
Yicai TV:
Statistics for the full year of 2018 indicated a further pickup in the investment expansion rate from the first three quarters. My question is, will infrastructure investment have a bigger impact on, or a bigger contribution to economic growth in 2019? What will be the points of weakness to be strengthened this year?
Ning Jizhe:
Investment indicators have underperformed compared to consumption indicators these past few years. We have quite a few points of weakness that need to be strengthened. Although we are already an upper-middle income country overall, and the world's second largest economy, we still have the problem of very unbalanced development. Levels of infrastructure facilities vary greatly between localities, so infrastructure development remains a major area of weakness to be strengthened. Since October, as our efforts to address points of weakness intensified, the expansion rate of fixed asset investment rebounded. Investment primarily covers three types: manufacturing, infrastructure and real estate. Infrastructure investment growth was weaker than that of manufacturing. In short, infrastructure development, especially for improving the consumption environment and for implementing the rural revitalization and regional development strategies, remains a weak point. Compared with developed countries, we have a relatively new expressway network and the world's longest total length of high-speed railways. However, when measured on a per capita basis, our operational infrastructure amount is remarkably lower. For example, we are low on airport coverage, compared with Europe and America. The task to accelerate infrastructure development for the direct benefit of people's livelihood in both urban and rural areas is still heavy.
Besides, houses built for people relocated from inhospitable areas need to be complete with supporting infrastructure facilities. In terms of government-subsidized housing, we will intensify efforts to rebuild shantytowns and supply public rental housing. Of course, agriculture and water conservancy are also areas with big room for improvement. We need to implement the rural revitalization strategy. There are also major water conservancy projects and major 13th Five-Year Plan projects still under construction. In terms of transportation, urban public transportation and transportation between city clusters need improvement, renovation and upgrading. I said a moment ago that we have an urbanization rate of nearly 60 percent. However, even with the fast railway construction, we still cannot fully satisfy people's needs. These are all weak points that are closely related to people's livelihood that need strengthening. It can be expected that, policies will continue to be put in place and take effect this year, resulting in stronger data than last year. Thanks.
Hu Kaihong:
That's all for today's press conference. Thank you, Mr. Ning. Thank you, everyone.
