China.org.cn | December 3, 2024
Shou Xiaoli:
Thank you, Mr. Sheng. Now, the floor is open for questions. Please state the news organization you represent before asking your questions. You may now raise your hand.
CCTV:
Overall, China's economy has performed stably since the beginning of this year, but there have also been some new problems and situations. How do you assess the economic performance within the first three quarters as well as the performance in the third quarter? Thank you.
Sheng Laiyun:
Thank you for your question. Since the beginning of this year, the domestic and international landscapes have been complex and volatile, with intertwined external changes and disruptions and increasing risks and challenges. Domestically, the economy is at a critical stage of structural adjustment and transformation where cyclical and structural contradictions are intertwined, thus the pains of adjustment are being unleashed. Faced with these new situations and problems in economic operations, the CPC Central Committee has exercised overall leadership, faced up to the difficulties, ensured sound decision-making and has promptly strengthened macro regulations. Particularly, in late September, an important meeting of the Political Bureau of the CPC Central Committee convened and released a package of incremental policies, greatly boosting market confidence and unleashing market vitality. Overall, in the first three quarters, national economic operations were stable and saw progress. In September, major economic indicators showed positive changes and the positive factors that drove the economy upward also accumulated. Looking at the data from the first three quarters, three notable characteristics stand out:
First, despite slight fluctuations in growth during the second and third quarters, overall economic operation has remained generally stable and has not changed. From the perspective of four major macroeconomic indicators—growth, employment, inflation and international balance of payments—the economy remained generally stable in the first three quarters. As I have just announced, the economy grew by 4.8% in the first three quarters, with a 5.3% growth in the first quarter, 4.7% in the second and 4.6% in the third. These fluctuations are minor and near the expected target. Employment and price trends were also generally stable. The surveyed urban unemployment rate was 5.1% for the first three quarters, remaining at 5.1% in the first half of the year. The surveyed unemployment rate remained relatively stable, but there was a slight variation with 5.0% in the second quarter and 5.2% in the third quarter. The CPI which reflects the degree of inflation rose by an average of 0.3% over the first three quarters: flat in the first quarter, up by 0.3% in the second quarter and up by 0.5% in the third quarter. Additionally, a basic equilibrium was maintained in the balance of payments. The situation in relation to foreign trade this year has been better than expected with exports growing by 6.2% in the first three quarters, and our foreign exchange reserves returning to $3.3 trillion. Thus, based on the four major macroeconomic indicators—growth, employment, inflation and international balance of payments—economic operations in the first three quarters were generally stable, and the overall stable tone of economic operations has not changed.
Second, the trend of solid progress made in pursuing high-quality development has not changed. We are now in a critical stage of transformation and upgrading, with the main task being promoting the transition of development model and advancing high-quality economic development. In the first three quarters, all regions fully and faithfully applied on all fronts the new development philosophy, firmly advancing high-quality economic development and making new progress in achieving innovative, coordinated, green and open development for all. In terms of development driven by innovation, investments in high-tech industries continued to grow rapidly in the first three quarters with the value-added of large high-tech manufacturing enterprises growing by 9.1% year on year, 3.3 percentage points higher than the average of large industrial enterprises. In terms of coordinated development, whether it's industrial structure, demand structure or regional structure, we are moving towards more coordinated development. From the perspective of industrial structure, the proportion of value-added of the manufacturing industry in that of large enterprises continued to increase. From the perspective of demand structure, the proportion of investment in high-tech industries continued to increase. In terms of green development, green industries like new energy vehicles, lithium-ion batteries and photovoltaic products – the "new trio" – continued to maintain double-digit, high growth. The production and consumption of wind power, nuclear power and photovoltaic power generation also maintained relatively rapid growth. In terms of open development, all regions resolutely advanced high-standard opening up, and, despite the complex and volatile international environment, exports grew by 6.2%. Exports to BRI partner countries grew even faster than the average rate. In terms of development for all, residents' income growth in the first three quarters slightly outpaced GDP growth, people’s wellbeing was ensured, and strong progress was made in food security and energy supply. This year, grain production achieved another bumper harvest. Thus, across these dimensions, China's economy continues to maintain the trend of stable high-quality development, improving structure and rising quality while also ensuring reasonable output growth.
Third, a key point I would like to highlight is that September saw positive changes in the national economy with marginal improvements in most indicators, which signals a trend of bottoming out and stabilizing. Under the influence of a series of policies, especially after the important meeting of the Political Bureau of the CPC Central Committee in late September, a package of incremental policies has been rapidly introduced, greatly boosting market confidence, improving expectations and revitalizing market dynamics. The main indicators for September show positive changes in economic performance. From the perspective of production, both industrial production and services showed marginal improvements. The value-added of large industrial enterprises grew by 5.4% year on year in September, up by 0.9 percentage point compared with August, marking the first rebound after four months of decline in industrial growth. The service production index increased by 5.1%, up by 0.5 percentage point compared with August. From the perspective of demand, total retail sales of consumer goods grew by 3.2% in September, up by 1.1 percentage points compared with August. Fixed asset investment grew by 3.4% year on year from January to September, remaining flat compared to the January-August period. This stability is notable because it followed several months of declining growth rates with the fixed asset investment. Additionally, market expectations have marginally improved. The manufacturing PMI in September was 49.8%, up by 0.7 percentage point compared with August, with the production index rising by 1.4 percentage points to 51.2%. We also conducted a business survey of 100,000 large enterprises, showing that the proportion of large industrial enterprises that expect optimistic fourth-quarter operations increased by 1.3 percentage points from the prior quarter and by 0.9 percentage point year on year. These changes indicate that market expectations are indeed improving positively. Additionally, another positive change in September was the increased vitality of the stock and real estate markets. In August, trading volumes on the Shanghai and Shenzhen stock exchanges fell by 15.3%, but in September trading volumes surged by 32.7%. Real estate market transactions have also become more active, and, although there are fluctuations in sales area and sales value, the accumulated declines are narrowing. During the National Day holiday, as you can see from reports on the Internet, home viewings and real estate transactions both rebounded markedly, reflecting an increase in market activity.
From the perspectives outlined above, we calculate that September saw positive changes in macroeconomic performance, indicating signs of stabilization. However, we also recognize that these changes are still preliminary and that the foundation for a robust economic recovery is not yet solid. In the next phase, we must diligently implement the CPC Central Committee's strategic decisions, accelerate the execution of a comprehensive set of incremental policies and reinforce existing measures to create a synergistic policy environment. This will help consolidate the emerging trend of economic stabilization and recovery, while continuously driving upward economic momentum, optimizing structural adjustments and fostering positive development. Thank you!