CCTV:

From the data just released, we note that China's average two-year growth in the first half of the year is faster than that in the first quarter. What are the factors that are driving economic growth? What's your opinion on the general performance of China's national economy in the first half of the year? Thank you.

Liu Aihua:

Thank you for your questions. The newly released data of all sectors shows that in the first half of the year, we continued to expand and consolidate the achievements in coordinating epidemic control with economic and social development, and China's economy sustained a steady recovery, delivering a stable performance with a consolidated foundation and a good momentum of growth. Its characteristics can be reflected in five aspects.

First, China's economy continued to resume growth. China's GDP expanded 12.7% year-on-year in the first half and rose 7.9% year-on-year in the second quarter, with a 1.3% increase quarter-on-quarter. Average two-year growth stood at 5.5%, 0.5 percentage point higher than that in the first quarter. Judging from the relevant indicators, the total freight volume in the first half of the year jumped 24.6% year-on-year, bringing the average growth for the past two years to 7.2%. Total electricity consumption climbed by 16.1% year-on-year, putting the average two-year growth at 7%.

Second, the economic structure was adjusted and improved. First of all, the support of industries has been enhanced. The contribution of the value added of the service sector to economic growth reached 53% in the first half of the year, 2.1 percentage points higher than that in the first quarter. The manufacturing sector cut a larger share of the GDP. The value-added of the manufacturing sector accounted for 27.9% of the GDP in the first half of the year, 1.3 percentage points higher than that in the same period last year. Besides, consumption played an increasing role in driving economic growth. In the first half of the year, the final consumption expenditure contributed 61.7% to economic growth, 42.5 percentage points higher than the contribution of the total capital formation. The consumption of upgraded consumer goods saw rapid growth. In the first half of the year, retail sales of sports and entertainment goods, communication appliances and cosmetics enterprises above designated size all registered an average two-year growth of more than 10%. Meanwhile, investment in sectors of weakness grew fast. In the first half of the year, the average two-year growth of the investment in high-tech industries and the social domain stood at 14.6% and 10.7% respectively, 10.2 percentage points and 6.3 percentage points higher than the total investment respectively. Fourth, the gap between urban and rural incomes has narrowed, with the ratio of urban and rural per capita disposable personal incomes falling to 2.61 in the first half of the year, 0.07 lower than the same period last year.

Third, innovation drivers were strengthened. First of all, new market entities registered rapid growth. The Basic Unit Database compiled by the National Bureau of Statistics at the end of June shows that the number of legal entities exceeded 30 million for the first time, up 16.6% year-on-year. Besides, new industries and new products witnessed fast growth. In the first half of the year, the value-added of hi-tech manufacturing enterprises above designated size saw an average two-year growth of 13.2%, 0.9 percentage point higher than that in the first quarter. From January to May, the total profits of hi-tech enterprises above designated size in the service sector jumped 27.4% year-on-year, with an average two-year growth of 12.5%, 4.2 percentage points higher than that of the total service enterprises above designated size. In terms of products, the output of new-energy automobiles, industrial robotics and integrated circuits sustained rapid growth year-on-year in the first half of the year. Third, new forms and models of business was growing. In the first half of the year, online retail sales of goods registered an average two-year growth of 16.5%, accounting for 23.7% of total retail sales of consumer goods. Express delivery services exceeded 50 billion items in the first half of the year, close to the level of the entirety of 2018.

Fourth, the quality and efficiency of economic performance improved in general. First of all, the ability of enterprises to make a profit was enhanced. From January to May, the total profits of industrial enterprises above designated size surged by 83.4% year-on-year, with an average two-year growth of 21.7%. The profit rate of their revenues reached 7.11%, 2.05 percentage points higher than that in the same period last year. From January to May, the total profits of enterprises above designated size in the service sector skyrocketed by 1.5 times year-on-year. Besides, the fiscal revenue continued to increase. From January to May, revenue in the general public budget grew by 24.2% year-on-year. Third, the capacity utilization rate also rose. The rate of the industrial capacity utilization stood at 78.4% in the second quarter, 4 percentage points higher than that in the same period last year, or 1.2 percentage points higher than that in the first quarter.

Fifth, the people's wellbeing continued to improve. First of all, the overall employment situation remained stable. In the first half of the year, the survey-based urban unemployment rate registered 5.2% on average, 0.6 percentage point lower than that in the same period last year, or 0.2 percentage point lower than that in the first quarter. The figure is lower than the expected target of roughly 5.5%. A total of 6.98 million new urban jobs were added, accomplishing 63.5% of the targets and tasks over the whole year. By the end of the second quarter, the number of rural migrant workers reached 180 million, basically recovering to the level of the same period in 2019. Besides, consumer prices posted a modest growth, up 0.5% year-on-year in the first half, a relatively low level of growth. Third, growth in personal income was basically in step with economic growth. In the first half of the year, per capita disposable income climbed by 12% in real terms year-on-year, with an average two-year increase of 5.2%, basically in keeping with economic growth.

Based on the five aspects mentioned above, the national economy in the first half of the year sustained a steady recovery and witnessed the consolidation of its firm growth and sound momentum. At the same time, faced with the volatile pandemic situation and many uncertainties internationally, the domestic economic recovery remains uneven and more efforts are needed to consolidate steady recovery development. In the next step, following the decisions and plans of the Central Economic Work Conference and the government work report, we will continue to deepen supply-side structural reforms, release the potential of domestic demand, help bail enterprises out, promote high-quality development, and endeavor to complete the economic and social development target and tasks throughout the year. That's all about the first question. Thank you.