Shou Xiaoli:

Thank you, Mr. Fu. Now the floor is open to questions, please identify your media outlet before raising questions.

CCTV:

According to the statistics just released, the economic growth of the third quarter is slower than the second quarter. What are the main reasons for the decrease? How do you comment on the third quarter's overall economic performance? Thank you. 

Fu Linghui:

Thank you for your questions. Your questions are very important. During the first half of the year, the Chinese economy maintained a stable recovery. In the third quarter, there have been rising risks and challenges at home and abroad. The pandemic is spreading around the world, the momentum of global recovery slowed, commodity prices in the international market remained high, some regions in China, hit by the pandemic and floods, felt the pressure of economic transformation and adjustments. Facing the complicated situation, under the strong leadership of the CPC Central Committee, local authorities and government departments coordinated efforts between epidemic prevention and control and economic and social development, and effectively implemented macro policies to keep the recovery's momentum. Major macro indicators stayed within a reasonable range, the job market remained generally stable, people's lives continued to improve, steady progress was achieved in structure adjustments, and the quality and returns of growth continued to improve, which has laid a good foundation for achieving the year's economic and social development targets. I will elaborate on this in the following respects: 

First, major macro indicators stayed within a reasonable range, and the recovery momentum continued. The economy continues to grow. Due to the high baseline of the same period last year and the impact of COVID-19 and floods, the economic growth of the first three quarters slowed compared with the same period last year. However, the growth rate continued to rise compared with previous quarters and the two-year average growth rate remained fast. The country's gross domestic product expanded 9.8% year on year in the first three quarters, higher than the target of 6%. In the third quarter, the country's GDP grew 4.9% year-on-year, the quarter-on-quarter GDP for the third quarter increased by 0.2%, with an average two-year growth of 4.9%. The job market remained generally stable. The economy continued to recover, the employment-first policy produced effects, the employment scale expanded, and the employment of key groups such as college graduates, veterans, rural migrant workers and urban people facing difficulties was guaranteed. During the first nine months of this year, the country created 10.45 million new jobs in its urban areas, achieving 95% of the annual target. China's surveyed urban unemployment rate stood at 5.2%, lower than the year's target of 5.5%. By the end of the third quarter, the number of rural migrant workers totaled 183.03 million, up 2% year on year, almost returning to pre-pandemic levels. The consumer price went up mildly. Agricultural production showed good momentum, hog production rebounded, the industrial service sector continued to grow, there was a large supply of basic living amenities, and the consumer price remained stable. In the first three quarters, the consumer price went up by 0.6% year on year, lower than the target of 3%. The international payments continued to improve. In terms of trade in goods, the trade surplus in the first three quarters expanded 23.7% year on year. In terms of trade in services, China's imports of tourism services decreased, and exports of modern services increased. The deficit of trade in services from January to August narrowed 66.7% year on year. Foreign exchange reserves were $3.2 trillion at the end of September, staying above $3 trillion for five consecutive months. 

Second, the economic structure was adjusted and improved, while the quality and efficiency of development were enhanced. First of all, the industrial structure continued to be optimized. The proportion of the manufacturing industry has increased, and the high-tech manufacturing industry has grown rapidly. In the first three quarters, the proportion of manufacturing value added was 27.4%, up by 1.1 percentage points over the same period last year. The value added of high-tech manufacturing enterprises above designated size increased by 20.1% year on year, faster than all industrial enterprises above designated size. The contribution rate of the service industry has increased. In the first three quarters, the contribution rate of the service industry growth to economic growth was 54.2%, up by 1.2 percentage points over the first half of the year. Second, the demand structure continues to improve. The contribution rate of final consumption has increased. In the first three quarters, the final consumption contribution rate was 64.8%, up by 3.1 percentage points over the first half of the year. Upgraded consumption and investment in high-tech industries grew rapidly. In the first three quarters, the retail sales of sports and entertainment products and cultural and office goods both increased by more than 20% year on year, and investment in high-tech industries increased by 18.7% year on year. Third, green development continued to improve. Energy consumption per unit of GDP continued to decline. In the first three quarters, energy consumption per unit of GDP fell by 2.3% year on year, up 0.3 percentage point over the first half of the year. The overall environmental quality has improved, and the people enjoy a greener environment. From January to August, the average PM2.5 concentration of 339 cities at and above the prefectural level across the country fell by 6.5% year on year. Fourth, corporate profits have grown rapidly. From January to August, the profits of industrial enterprises above designated size have increased by 49.5% year on year, and the profits of service enterprises above designated size have increased by 35.7%.

Third, the reform and opening-up continued to be promoted, and new drivers of growth continued to increase. First, the results of supply-side structural reform continued to be consolidated. In the third quarter, the utilization rate of industrial capacity was 77.1%, which was a relatively good level compared with the same period in recent years. The asset-liability ratio of enterprises fell. At the end of August, the asset-liability ratio of industrial enterprises above designated size was 56.4%, a year-on-year decrease of 0.4 percentage point. Enterprise revenue costs fell. From January to August, the cost per 100 yuan of operation revenue of industrial enterprises above designated size was reduced 0.65 yuan compared with the same period last year. The effect of shoring up weaknesses was obvious. In the first three quarters, investment in education and health increased by 10.4% and 31.4% year on year, respectively, faster than the growth of total investment. Second, opening-up was further expanded. China's import and export trade continued to maintain rapid growth. In the first three quarters, the total value of imports and exports of goods increased by 22.7% year on year. Utilization of foreign capital continued to increase. From January to August, China's foreign investment in actual use increased by 22.3% year on year. The joint construction of the Belt and Road has been steadily promoted. In the first three quarters, China's total imports and exports to countries along the Belt and Road increased by 23.4% year on year; and the total number of China-Europe freight trains exceeded 10,000, up by 29% year on year. Third, new energy has grown rapidly. Investment in innovation continued to increase, and green, low-carbon smart products continued to emerge. In the first three quarters, the output of new energy vehicles and industrial robots increased by 172.5% and 57.8% year on year, respectively. Information technology has been widely applied, and new business forms and models such as livestreaming commerce and the platform economy have rapidly emerged. In the first three quarters, the online retail sales of physical commodities increased by 15.2% year on year, accounting for 23.6% of total retail sales of consumer goods.

Fourth, the incomes of residents continued to grow, and people's livelihoods have been effectively ensured. First, the incomes of residents continued to increase. The economy continued to recover, enterprise revenue improved, and employment has been generally stable, which have helped increase residents' incomes. In the first three quarters, the national per capita disposable income nominally increased by 10.4% year on year, and the actual growth rate was 9.7% after deducting price factors, which was basically in line with economic growth. In terms of urban and rural areas, the income of rural residents grew faster than that of urban residents. In the first three quarters, the nominal growth rate of rural residents' income was 2.1 percentage points faster than urban residents. Second, the prices of commodities related to residents' lives have stabilized and declined. Agricultural production was generally good, hog production continued to recover, food and other related commodities were in sufficient supply, and residents' lives were better guaranteed. In the first three quarters, food prices fell by 1.6% year on year, of which pork prices fell by 28% and grain prices rose by 1%. Third, guarantees of people's livelihood continued to be strengthened. Government public services continued to improve, and residents' welfare and transfer income increased. From January to August, among the general public budget expenditures across the country, expenditures on education and housing increased rapidly. In the first three quarters, the national per capita transfer income increased by 7.9% year on year, and the two-year average growth rate was 8.4%.

All these show that the fundamentals of China's long-term economic growth continue to be present, and the characteristics of strong development resilience, great potential, and broad wiggle room are obvious. However, we must notice that the international environment is unstable with many uncertainties, the domestic economic recovery is still unstable and uneven, and the challenge of maintaining the economy's stable operation has increased. In the next stage, in accordance with the decisions and arrangements of the CPC Central Committee and the State Council, we must fully, accurately and comprehensively implement the new development philosophy, build a new development pattern, implement the macroeconomic policy cross-cyclical adjustments, promote stable economic recovery and maintain economic operations within a reasonable range. Thank you.