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SCIO briefing on China's economic performance in first half of 2020

The State Council Information Office held a press conference on July 16 in Beijing to brief the media on China's economic performance in the first half of 2020.

China.org.cnUpdated: July 17, 2020

Shou Xiaoli:

Now the floor is open for questions. Please identify your news outlet before asking questions.


The economy has improved significantly in the second quarter. How would you evaluate the overall performance in the first half? Thank you.

Liu Aihua:

Thank you for your question. According to the data presented in the initial briefing, since the beginning of this year, the impact of the COVID-19 outbreak is unprecedented, plunging the world economy into its worst recession since World War II. In the first half, facing severe risks and challenges, the entire nation coordinated its efforts to advance both prevention and control of the epidemic and continue to promote economic and social development. With the implementation of a series of policies, China's economy shifted from slowdown to gradual recovery. The characteristics of economic performance in the first half are mainly reflected in following five aspects:

First, the main indicators showed restored growth. GDP for the first quarter declined by 6.8% year-on-year, while the second quarter saw growth of 3.2%; The total added value of industrial enterprises above designated size declined by 8.4% in the first quarter, but then grew by 4.4% in the second quarter; The total added value of tertiary industry fell by 5.2% in the first quarter, yet then grew by 1.9% in the second quarter; The decline of total retail sales of consumer goods narrowed by 15.1 percentage points in the second quarter compared to the first quarter; The decline of investment in fixed assets narrowed by 13 percentage points from the first to the second quarters. Therefore, the quarterly indicators showed the economy has obviously improved. Looking at the monthly figures, the total added value of industrial enterprises above designated size grew for three consecutive months. The Index of Services Production increased for two consecutive months. The decline of the total retail sales of consumer goods narrowed for four consecutive months. The total value of exports increased for the third straight month. It is by no means easy for China, a large developing country with a population of 1.4 billion, to effectively control the epidemic in a short period of time and ensure its economy can be shifted from slowdown to a rise. China has made it, which shows the strong resilience and potential of the national economy and reflects the effect of the policies issued by the CPC Central Committee and the State Council in a holistic way.

Second, employment levels and consumer prices are generally stable. In June, the surveyed unemployment rate in urban areas was 5.7%, a slight decrease for the second straight month. Specifically, the surveyed unemployment rate of population aged from 25 to 59 was 5.2%, 0.5 percentage points lower than the overall urban rate. In June, enterprise employees worked on average 46.8 hours per week, up by 0.7 hours from the previous month. The increase of consumer prices showed a downward trend. In the first half-year, consumer price went up by 3.8% year-on-year, 1.1 percentage points lower than the first quarter figure; the core CPI rose 1.2% year-on-year, achieving basic stability. In June, consumer prices rose by 2.5%, within the range of a moderate rise.

Third, basic livelihood was ensured effectively. The poverty alleviation drive has achieved outstanding results. In the first half of the year, in places with a large number of poor people such as Sichuan, Guizhou, and Guangxi, the nominal annual growth of per capita disposable income of rural resident was between 5.5% and 7.6%. We continued to strengthen social security and assist those most in need. In the first half of the year, the nominal growth of per capita transfer income reached 8.2%, of which per capita old-age pension and retirement pensions increased by 9.3%, and social assistant grants and subsidies per capita increased by 13.2%. Basic living consumption of residents maintains rapid growth. In terms of the retail sales of goods above designated size in the first half of the year, grain, oil and food grew by 12.9% year-on-year and daily necessities increased by 5.2%.

Fourth, new growth drivers have become stronger in various emerging fields. In the first half, the added value of high-tech manufacturing and equipment manufacturing grew by 4.5% year-on-year, accounting for 14.7% of the added value of industries above designated size, an increase of 0.9 percentage points from the same period last year. Investment in the high-tech sector continued to increase. In the first half, investment in high-tech manufacturing industries and high-tech services went up by 5.8% and 7.2% year-on-year respectively. Investment in the pharmaceutical industry increased by over 10%, and the e-commerce service industry achieved a gain of over 30%. New infrastructure and other related products grew relatively fast. In the first half, urban rail vehicles in service increased by 13%, and the output of charging piles increased by 11.9%. In the first half, online retail sales of physical goods increased by 14.3% year-on-year, accounting for 25.2% of the total retail sales of social consumer goods, up by 5.6 percentage points from the same period last year.

Fifth, market expectation was generally good. The Manufacturing Purchasing Managers Index stood at 50.9% in June, staying above the threshold for the fourth consecutive month. The Business Activity Index for the non-manufacturing sector was 54.4%, achieving a rise for the fourth straight month.

In general, judging from these five characteristics, it can be seen that China's economy overcame the adverse impact of the epidemic in the first half of the year and rebounded gradually. However, we should also be aware that some indicators in the first half, including GDP, industry, service industry, consumption, and investment, are still in decline. Therefore, growth in the second quarter is just a matter of restorative growth. The losses caused by the epidemic still need to be recovered and there is much work to be done to get the economy back to normal.

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