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Chinese economy off to robust start in 2024 as recovery gains traction

Xinhua | March 19, 2024

The Chinese economy has maintained good recovery momentum, beginning the year on a solid note as the country's macro policies took effect, official data showed Monday.

In the first two months of 2024, most key indicators saw sound increases, employment remained generally stable, and new economic growth drivers and advantages began accumulating, according to the National Bureau of Statistics (NBS).

Given its solid performance in January and February, China has the conditions and support to achieve its full-year growth target of around 5 percent for 2024 through enhanced efforts, NBS spokesperson Liu Aihua said.

Customers shop at Haikou International Duty-Free Shopping Complex in Haikou, south China's Hainan Province, Feb. 11, 2024. (Xinhua/Guo Cheng)


China's value-added industrial output increased 7 percent during the January-February period, accelerating 0.2 percentage points from December 2023, according to the NBS.

The services sector also registered accelerated growth in the first two months, with its official production index up 5.8 percent year on year, up from the 5.5 percent growth rate for the same period last year.

Retail sales of consumer goods climbed 5.5 percent year on year in the period as people increased their spending during the Spring Festival holiday. Fixed-asset investment grew 4.2 percent year on year, with that rate being 1.2 percentage points higher than the 2023 full-year growth rate.

Monday's data also shows that the country's surveyed urban unemployment rate was 5.3 percent in February, which was 0.1 percentage points higher than in January but 0.3 percentage points lower than in the same period of 2023.

Liu attributed the upbeat momentum to the implementation of supportive government policies, in addition to uplifted demand and spending over the holiday.

In February, China's loan prime rate (LPR), a market-based benchmark lending rate, saw its over-five-year rate shrink 25 basis points to 3.95 percent in the largest drop in recent years.

Movie-goers take selfies in front of a movie poster at a theater in Qianxi City, southwest China's Guizhou Province, Feb. 18, 2024. (Photo by Fan Hui/Xinhua)


The Chinese economy's sound performance in the first two months has laid a good foundation for full-year growth, Liu said, citing positive factors such as greater market vitality, rapid growth in new types of consumption, and increased dynamism in the flow of economic factors like people and goods.

She said that during the Spring Festival holiday last month, China's commercial box office revenue soared 80.1 percent year on year, and total spending on domestic travel increased 47.3 percent.

China has set an economic growth target of around 5 percent for 2024, according to this year's government work report. Its economy expanded by 5.2 percent last year.

Looking ahead, Liu said she expects the government's supportive policies to play a greater role in economic recovery. Such policies would involve a large-scale equipment renewal, trade-ins of consumer goods and the issuance of ultra-long special treasury bonds.

But she warned that the foundations of economic recovery still need to be consolidated as external instabilities and uncertainties linger and domestic issues such as a lack of effective demand remain.

On the real estate sector, Liu said that China's property market is still in the process of adjustment and transformation, pledging the country will accelerate its cultivation of a new development model for the industry.

"We need to observe the economic trends further later in the year and improve the implementation of policies," she said.

An aerial drone photo taken on Jan. 8, 2024 shows robotic arms processing components for new energy vehicles at a private company in Changxing Economic and Technological Development Zone of Huzhou City, east China's Zhejiang Province. (Photo by Tan Yunfeng/Xinhua)


With economic recovery continuing at a steady pace, China has made significant strides in its development of new quality productive forces, which is high on this year's agenda, according to Liu.

During the January-February period, China's high-tech manufacturing industrial output registered a 7.5 percent year-on-year increase, up 1.1 percentage points from December 2023.

The country's production of smart and environment-friendly products has seen particularly rapid growth. In January and February, its output of services robots increased 22.2 percent from the same period last year, and its output of 3D printing equipment increased 49.5 percent.

On the investment front, investment in high-tech industries grew 9.4 percent year on year in the first two months, and investment in the manufacturing sector's technological transformation saw double-digit growth.

China will strive to modernize its industrial system and develop new quality productive forces at an accelerated pace, according to the government work report. Related tasks include the improvement and upgrading of industrial and supply chains, and the cultivation of emerging and future-oriented industries.

Wen Bin, chief economist at China Minsheng Bank, said in a co-authored article that investment in the manufacturing sector is likely to be maintained at a high level as China continues to pursue the development of new quality productive forces, and as it continues to implement policies such as those related to a large-scale equipment renewal.