Press briefing on national economic performance in H1

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Read in Chinese

Speakers:

Mr. Mao Shengyong, spokesperson for the National Bureau of Statistics

Chairperson: 

Hu Kaihong, spokesperson for the State Council Information Office of China

Date: 

July 16, 2018

Hu Kaihong:

Ladies and gentlemen, good morning. Welcome to this press conference. Today, we are delighted to invite Mr. Mao Shengyong to introduce China's economic performance in the first half of 2018. Mr. Mao is the spokesperson of the National Bureau of Statistics (NBS). He will also answer some of your questions.

Now, let's welcome Mr. Mao to give his briefing.

Mao Shengyong:

Ladies and gentlemen, friends from the press, good morning. As usual, I will make a brief introduction before the Q&A session.

In the first half of this year, China's economic performance was generally sound and stable with good momentum. Despite complex and grim internal and external environments, all regions and departments worked hard to overcome obstacles and meet the requirements of high-quality development. This half-year has seen further structural adjustments, more new growth drivers to replace old ones, and steady improvement in the quality and effect.

According to preliminary statistics, China's GDP in the first half of this year was 41.9 trillion yuan, up 6.8 percent on the same period last year in comparable prices. Quarterly, the increase of GDP year-on-year in Q1 and Q2 was 6.8 percent and 6.7 percent respectively, maintaining a growth rate between 6.7 percent and 6.9 percent for 12 consecutive quarters. In the industrial sector, the added value of the primary, secondary and tertiary industries reached 2.21 trillion yuan, 16.93 trillion yuan and 22.76 trillion yuan respectively, up by 3.2 percent, 6.1 percent and 7.6 percent year-on-year.

1. The agricultural sector posted a sound performance following an improved planting structure. 

After the grain planting structure was adjusted, bumper crop yields are expected this summer. The structural reform of agricultural supply has been intensified, with an increase in the planting area of cotton and soybeans. 

Livestock farming remained stable; in the first half of 2018, the combined total of pork, beef, mutton and poultry was 39.95 million metric tons, a yearly growth of 0.9 percent. Specifically, the amount of pork was 26.14 million metric tons, growing 1.4 percent. The total number of hogs raised was 409.04 million, down 1.8 percent, while that of slaughtered hogs was 334.22 million, up by 1.2 percent, both year-on-year.

2. Overall industrial growth was stable and the structure continues to optimize

In the first half of this year, the real growth of the total value added of industrial enterprises above the designated size was 6.7 percent, and the growth rate was 0.1 percentage points lower than that of the first quarter. An analysis by types of ownership showed that the value added of state holding enterprises was up by 7.6 percent; that of the collective enterprises, down by 1.9 percent; share-holding enterprises, up by 6.7 percent; and enterprises funded by foreign investors or investors from Hong Kong, Macao and Taiwan, up by 6.2 percent. 

In terms of sectors, the value added of the mining industry increased by 1.6 percent, manufacturing increased by 6.9 percent, and the production and supply of electricity, thermal power, gas and water increased by 10.5 percent. The value added of the high-tech industry and equipment manufacturing increased by 11.6 percent and 9.2 percent year-on-year, 4.9 percentage points and 2.5 percentage points faster than that of the industrial enterprises above the designated size. 

In June, the value added of the industrial enterprises above the designated size was up by 6.0 percent year-on-year. From January to May, the profits made by industrial enterprises above the designated size stood at 2.7298 trillion yuan, up 16.5 percent year-on-year. The profit rate of the principal activities of the industrial enterprises above the designated size was 6.36 percent, up by 0.35 percentage point compared with the same period last year.

3. The service industry is growing rapidly and the emerging service sector is booming.

In the first half of the year, the national service industry production index increased by 8 percent year-on-year, and the growth rate dropped by 0.1 percentage points from the first quarter, maintaining relatively fast growth. Namely, information transmission, software and information technology services, and leasing and business services maintained particularly rapid growth. In June, the national service industry production index increased by 8 percent year-on-year. From January to May, the operating income of service enterprises above the designated size increased by 13.3 percent year-on-year, or 0.2 percentage points higher than the same period of the previous year. Of those, the emerging strategic service industry, technology service industry and high-tech service industry's operating incomes increased by 18.1 percent, 17.5 percent and 15.4 percent respectively, an increase of 2.4, 5.0 and 4.5 percentage points compared to the same period of the previous year.

4. The national residents' consumption spending and market sales maintained a steady-momentum growth, and the sales of goods for consumption upgrading enjoyed rapid growth.

In the first half of this year, the national residents' per capita consumption spending was 9,609 yuan, which means a nominal growth of up to 8.8 percent year-on-year, 1.2 percentage points faster than the first quarter, and an actual growth of 6.7 percent year-on-year and 1.3 percentage points faster than in the first quarter after adjusting for inflation. Urban residents' per capita consumption spending was nominally up 6.8 percent, 1.1 percentage points higher than last year. The rural residents' per capita consumption spending was nominally up 12.2 percent, 1.2 percentage points higher than last year. In the first half of the year, the total retail sales of consumer goods reached 18.0018 trillion yuan, an increase of 9.4 percent year-on-year, and the growth rate fell by 0.4 percentage point compared with the growth from the first quarter. Analyzed by locations for business units, the retail sales of consumer goods in urban areas reached 15.4091 trillion yuan, up by 9.2 percent; the retail sales of consumer goods in rural areas reached 2.5927 trillion yuan, up by 10.5 percent. Grouped by consumption patterns, the revenues from the catering sector were 1.9457 trillion yuan, up by 9.9 percent, while commodity retail revenues were 16.0561 trillion yuan, up by 9.3 percent. The sales of goods for consumption upgrading grew faster, with household appliances and audio-visual equipment, communication equipment, and cosmetics above the limitation unit witnessing a year-on-year growth of 10.6 percent, 10.6 percent and 14.2 percent respectively, 0.2 percentage point, 0.5 percentage point, and 2.9 percentage points faster than the same period of last year, respectively. In June, the total retail sales of consumer goods increased 9.0 percent on a year-on-year basis, 0.5 percentage point faster than last month.

Mao Shengyong:

5. Investment in fixed assets secured stable growth as those in private and manufacturing sectors started to rebound.

In the first half of this year, investment in fixed assets (rural households are not included) hit 29.73 trillion yuan (US$4.45 trillion), up 6.0 percent year on year and with the growth ratio falling 1.5 percentage points compared to that in the first quarter this year.

The private investment among others aggregated to more than 18.45 trillion yuan, securing a year-on-year growth of 8.4 percent, with the growth ratio up 1.2 percentage points from the same period last year.

In view of different sectors, the investment grew by 13.5 percent in the primary sector and 3.8 percent in the second industry, of which the investment in manufacturing industry increased by 6.8 percent, marking three consecutive months of growth, totaling 3.0 percentage points higher than that in the first quarter this year and 1.3 percentage points higher year on year. The investment in the tertiary industry had an increase of 6.8 percent, with the investment in infrastructure going up by 7.3 percent.

Investment in high-tech manufacturing soared by 13.1 percent year on year, with a growth rate of 7.1 percentage points higher than the growth rate of the overall investment.

During the same period, investment in the real estate sector amounted to over 5.55 trillion yuan, up 9.7 percent year on year. Commercial housing that is available to be purchased across the country climbed up to more than 771.43 million square meters, up 3.3 percent year on year, and generated nearly 6.69 trillion yuan in sales, up 13.2 percent year on year.

6. The surplus of import and export of goods has narrowed, and the trade structure has continued to improve.

In the first half of this year, the volume of exports and imports in goods totaled 14.12 trillion yuan, up 7.9 percent year-on-year. The export volume totaled 7.51 trillion and import 6.61 trillion yuan, up by 4.9 percent and 11.5 percent respectively. The trade surplus was 901.3 billion yuan, a fall of 26.7 percent year-on-year. The trade structure was optimized during the same period. The general trade import and export grew by 12.2 percent, accounting for 59 percent of the total volume and up by 2.3 percentage points compared to the same period of the previous year. The export of mechanical and electrical products increased by 7 percent, accounting for 58.6 percent of the total export volume. Imports and exports with China's top three largest trading partners, namely the EU, U.S., and ASEAN, continued to grow, with the growth rates reaching 5.3 percent, 5.2 percent and 11 percent respectively and accounting for 41 percent of China's total foreign trade volume. Over the same period, the foreign trade with 16 Central and Eastern European Countries grew by 14.7 percent, 6.8 percentage points higher than the growth rate of the foreign trade in goods. In June, the foreign trade volume totaled 2.49 trillion yuan, up 4.3 percent year-on-year. The export volume totaled 1.38 trillion and import 1.12 trillion yuan, up by 3.1 percent and 6.0 percent respectively. In the first half of this year, the export delivery value of industrial enterprises above designated size reached 5.72 trillion yuan, up by 5.7 percent year-on-year. The figure for June was 1.05 trillion yuan, up 2.8 percent.

7. Residents' income has been growing steadily and employment situation remains stable.

In the first half of the year, personal per capita disposable income was 14,063 yuan, an increase of 8.7 percent in nominal terms, and a 6.6 percent increase in real terms after deducting for price factors. Factoring for permanent residence, the urban and rural per capita disposable income totaled 19,770 and 7,142 yuan respectively, with the nominal growth rate reaching 7.9 percent and 8.8 percent respectively. The real growth rates were 5.8 percent and 6.8 percent respectively after deducting for price factors. The ratio of urban to rural per capita disposable income was 2.77, a reduction of 0.02 compared to the same period of the previous year. The median of the national per capita disposable income was 12,186 yuan, an increase of 8.4 percent in nominal terms. In June, the surveyed national urban unemployment rate was 4.8 percent, the same as the previous month and dropping by 0.1 percentage points compared to the same period of the previous year. The figure of 31 large cities was 4.7 percent, the same as the previous month and 0.2 percentage points lower compared to the same period of the previous year. By the end of the second quarter, the migrant rural labor force totaled 180.22 million, 1.49 million more than that of the same period of the previous year, in other words, up by 0.8 percent year-on-year. The average income of the migrant rural labor force per month was 3,661 yuan, up 7.5 percent year-on-year. 

8. The Consumer Price Index (CPI) and the Producer Price Index (PPI) registered moderate growth.

In the first half of the year, China's national CPI rose 2.0 percent year-on-year, 0.1 percentage point lower than the growth rate of the first quarter. By category, food, tobacco and liquor prices rose 1.4 percent, clothing prices 1.1 percent, housing 2.3 percent, daily necessities and services 1.6 percent, transport and communications 1.2 percent, education, culture and entertainment 2.1 percent, health care 5.5 percent, and other goods and services 1.1 percent year-on-year. In June, the national CPI rose 1.9 percent year-on-year, 0.1 percentage point higher than the growth rate in May. The gauge fell 0.1 percent on a month-on-month basis.

In the first half of the year, China's national PPI rose 3.9 percent year-on-year, 0.2 percentage point higher the growth rate of the first quarter. The national purchasing price index grew 4.4 percent year-on-year. In June, the PPI rose 4.7 percent year-on-year, 0.6 percentage point higher than the growth rate of the previous month. The figure grew by 0.3 percent month-on-month. The purchasing price index rose 5.1 percent year-on-year, up 0.4 percent from one month ago.

Mao Shengyong:

9. Industrial transformation and upgrading delivered clear progress, and new growth drivers developed rapidly.

The economic structure continued to improve. In terms of the industrial structure, the growth rate of the added value created by the tertiary sector was 1.5 percent higher than that of the secondary sector. The figure accounted for 54.3 percent of GDP, 0.3 percentage point higher than the same period of last year. The value generated by the secondary sector took up 13.9 percent of GDP. As to the demand structure, final consumption expenditure contributed 78.5 percent to economic growth, or 47.1 percentage points higher than total gross capital formation. 

New industries and products also sprang up. As to the structure of the industry sector, the added value created by strategic emerging industries went up by 8.7 percent year-on-year, 2.0 percentage points higher than the growth rate of industries above the designated size. The output of new energy vehicles rose 88.1 percent, industrial robots 23.9 percent and integrated circuits 15.0 percent year-on-year. 

New types of consumption thrived. In terms of trade structure, national online retail sales registered 4.081 trillion yuan in the first half of the year, up 30.1 percent year-on-year. Specifically, the online retail sales of physical goods reached 3.1277 trillion yuan, up 29.8 percent. The figure accounted for 17.4 percent of the total retail sales of consumer goods, 3.6 percentage points higher than the same period last year. The online retail sales of non-physical goods was 953.3 billion yuan, up 30.9 percent.

Steady progress was achieved in green development. In terms of energy conservation and emissions reduction, energy consumption per unit of GDP fell by 3.2 percent year-on-year.

10. Deepened supply-side structural reform and positive market expectations 

Structural overcapacity cutting continued to be advanced. In the first half of 2018, the industrial capacity utilization rate reached 76.7 percent, an increase of 0.2 percentage points compared to the Q1 level, and an increase of 0.3 percentage points over the same period last year. The achievements in destocking were remarkable. The floor space of commercial buildings for sale dropped 14.7 percent year-on-year at the end of June. The leverage ratio and costs of enterprises continued to drop. The debt-to-asset ratio of industrial enterprises with annual revenue of 20 million yuan or more at the end of May stood at 56.6 percent, 0.6 percentage pointslower year-on-year. From January to May, the cost per 100 yuan of revenue from the principle business of industrial enterprises with annual revenue of 20 million yuan or more was 84.49 yuan, 0.31 yuan less year-on-year. Investment in weak areas saw rapid growth. In the first half of this year, investment in ecological protection and environmental governance grew by 35.4 percent, and investment in agriculture increased by 15.4 percent, 29.4 percentage points and 9.4 percentage points higher than the overall investment. Market expectations remained positive. In June, the PMI Composite Output Index was 54.4 percent; the manufacturing industry's PMI was 51.5 percent; the non-manufacturing industry's business activity index was 55.0 percent, pointing to continued expansion of the overall economy. 

In general, the national economy in the first half of 2018 has continued to experience stable performance and improved momentum. The favorable conditions supporting high quality growth have increased, creating a solid foundation for achieving the major economic and social development goals for this year. However, uncertainties in the international environment have been increasing, and the structural readjustment in China has entered a crucial stage. The country must stick to its policy of making progress while pursuing stability and maintaining strategic focus. China must adhere to the supply-side structural reform, expand effective demands and promote the real economy. Further, it should actively cope with international challenges, and prevent and resolve risks and potential problems in a bid to achieve stable social expectations. China should take a holistic approach in pursuing steady growth, reform, and structural readjustment as well as improving people's livelihood and preventing risks so as to ensure stable and healthy economic performance.

Hu Kaihong:

Thank you, Mr. Mao. Now, the floor is open to questions. Please identify the media outlet you represent before asking a question.