China.org.cn | December 6, 2024
Yicai:
This year's government work report set the annual economic growth target at around 5%. Based on the economic data for the first ten months of this year, what is your view on the fourth quarter's trend? Additionally, do we currently have the positive and favorable conditions to achieve the annual target? Thank you.
Fu Linghui:
Thank you for your questions. The realization of this year's economic growth target is of great concern. This year, in the face of complex changes within the international environment as well as new situations and challenges within the domestic economy, under the strong leadership of the Party Central Committee, various regions and departments have strengthened counter-cyclical adjustments. As a result, the national economy has maintained a stable and progressive growth trend overall. GDP grew by 4.8% year on year in the first three quarters, laying a solid foundation for achieving the annual development goal. From economic changes in September and October, particularly in October, we have gained further confidence in achieving the annual economic development target. The confidence comes from several aspects:
First, the momentum for economic recovery has been strengthened. From major indicators in October, the service industry showed a clear recovery. The service sector production index in October increased by 1.2 percentage points compared to the previous month, representing the highest growth rate this year as well as a continuing acceleration in growth rate for two consecutive months. Driven by relevant policies, the financial industry production index accelerated by 3.7 percentage points while the real estate production index showed a year-on-year increase of 0.8% this month, marking the first time since June of last year that the industry shifted from decline to growth. Market sales also accelerated, driven by favorable factors such as the policy for consumer goods trade-in programs, the National Day holiday and early "Double Eleven" promotional activities. In October, the total retail sales of consumer goods increased by 4.8% year on year, 1.6 percentage points faster than the previous month, with retail sales of goods accelerating by 1.7 percentage points. With the recovery of market demand, the coordination between enterprise production and sales has improved. In October, the production-sales ratio of industrial products above a designated size reached 97.3%, up by 1.3 percentage points from the previous month, attaining the second-highest level this year. At the same time, driven by "Two Major" construction, infrastructure investments increased by 4.3% year on -year from January to October, seeing an acceleration compared to the period between January and September.
Second, the effectiveness of macroeconomic policies has become noticeable. In the face of new issues and challenges in this year's economy, the Party Central Committee has taken a comprehensive view, confronted difficulties, made scientific decisions and acted promptly. A package of incremental policies has been launched and is steadily being implemented. October was the first month after the introduction of these policies. From that month's data, we can see that the effects from these policies are beginning to show. Major economic indicators have seen a significant rebound, especially in sectors related to the "Two New" and "Two Major" policies, such as significant growth in sales of automobiles, home appliances and office supplies. Investments in infrastructure such as water conservancy, ecological protection and roads have also shown steady growth. In the next phase, as various policies are fully implemented and yield results, the combined policy effects will further emerge and the positive factors and favorable conditions in economic operations will continue to increase, providing strong support for the economic recovery and growth in the fourth quarter.
Third, confidence with marketplace expectations has seen a boost. Confidence is a key factor in consolidating and enhancing the momentum of economic recovery. After the recent series of incremental policies were officially launched, market activity noticeably increased. The real estate market has warmed up, the capital market has rebounded and both business and consumer confidence have improved. In October, the volume of real estate consultations and property viewings significantly increased, while the sales area and sales volume of commercial housing improved considerably. The trading volume and value on the Shanghai and Shenzhen stock exchanges also grew sharply. The manufacturing's PMI and the service sector's Business Activity Index both rose into the expansion zone, and the consumer confidence index also showed an uptick for the first time in recent months. As long as confidence is present, businesses will be willing to expand investment and production, while consumers will be willing to spend, which will strongly drive economic recovery.
In the next phase, we will earnestly implement the Party Central Committee's decisions and arrangements, further strengthen the implementation of various policy measures and reinforce policy coordination, continuously consolidating the momentum of economic recovery and growth and striving to achieve the annual economic growth target.
Thank you.