CCTV:

Since late September, the central government has introduced a raft of incremental policies. What role have these policies played on the national economic data in October? Also, how do you evaluate their performance? Thank you.

Fu Linghui:

Thank you for your questions. Recently, various departments have rolled out a package of incremental policies to promote economic upturn. With the accelerated implementation of existing policies and the launch of a package of incremental policies, major economic indicators in October have shown a significant rebound. Social expectations continue to improve, the quality of development has steadily enhanced, and positive factors have accumulated. The economy is stabilizing and recovering robustly. It can be said that the combined effect of these policies has been effectively unleashed, yielding substantial results. These results can be summarized in the following four aspects.

First, domestic demand has seen further expansion. Since October, the implementation of the "Two New" policy on "renewal & trade-in" (namely, large-scale equipment renewal and trade-in of old consumer goods) and the "Two major" initiative on carrying out major national strategies and building up security capacity in key areas has continued to play a positive role in releasing consumption potential as well as stimulating investment growth. In terms of consumption, driven by consumer goods trade-in programs, growth rates in October for units above designated size in household appliances, audiovisual equipment, automobiles, furniture as well as cultural and office supplies have all accelerated compared to the previous month. These four categories alone contributed 1.2 percentage points to the month-on-month acceleration of 1.6 in total retail sales for consumer goods, showing clear results and a more significant improvement than in September. In terms of investment, driven by large-scale equipment upgrades, investments in equipment and tools increased by 16.1% year-on-year from January to October, driving the growth of total investments by 2.1% and contributing to investment growth's rate exceeding 60%. Meanwhile, as the "Two Major" initiative continues to gain momentum, the physical workload of related projects has gradually taken shape, which has also driven the recovery of investment in infrastructure. The country's investment in infrastructure construction rose 4.3% from a year ago during the January-October period, 0.2 percentage point faster than the previous month, marking the first rebound of recent infrastructure investments. 

Second, production has seen further stimulation. Improved demand has driven positive production trends in related industries. For instance, the production of consumer goods linked to trade-in programs, such as new energy vehicles and home appliances, has seen rapid growth. Specifically, the production of new energy vehicles increased by 48.6% year-on-year, boosting the output of related industries such as charging piles by 25.2%. In household appliances, products like air humidifiers, room air conditioners and electric heating appliances have all seen double-digit production growth. In terms of the production of goods for investment, industries and products related to equipment upgrades have experienced significant growth. In October, the added value of smart consumer device manufacturing and shipbuilding, as well as related equipment industries, grew by 18.8% and 16%, respectively. The output of special equipment for processing agricultural products, traditional transportation machinery for excavating and shoveling and special equipment for packaging increased by 54.5%, 28.4% and 19.2%, respectively. These situations also reflect a strong boost in large-scale equipment renewal when it comes to production within the equipment industry.

Third, confidence has seen a further boost. As the effects of the package of incremental policies become increasingly apparent, market vitality has increased and confidence among businesses, consumers and investors has risen. For businesses, indexes such as Purchasing Managers' Index for the Manufacturing Sector and Business Activity Index for the Service Sector returned to expansionary territories in October. Among them, the manufacturing production and business activity expectations index reached a recent high point while the non-manufacturing business activity expectations index moved into a higher prosperity zone, reflecting growing confidence with market development. For consumers, the consumer confidence index has risen for the first time after six consecutive months of decline. At the same time, the capital market has warmed up, with transaction volumes and amounts in the Shanghai and Shenzhen stock markets reaching new highs in October. The growth rate of sales income from capital market services also has significantly increased by more than 10 percentage points compared to the previous month. Both of these reflect a gradual restoration of investors' confidence.

Fourth, development has seen further promotion. Overall, under the impetus of a series of policy combinations, the national economy in October maintained stability and saw progress, with momentum for economic recovery strengthened. At the same time, under policy support, the quality of development has also been steadily improved. In the context of updates to automobile scrapping and trade-in programs, most users have opted for new energy vehicles, driving a rapid increase in sales of new energy vehicles in October, with domestic retail penetration exceeding 50% for four consecutive months. Sales of high-efficiency, energy-saving home appliances compliant with low-carbon requirements have achieved double-digit, year-on-year growth, adding momentum to green development. Additionally, the "Two Major" initiative has strongly supported the construction of high-standard farmland, underground pipeline networks, urban renewal and other welfare projects, stabilizing growth in investment within the welfare sector. Moreover, the real estate market has been stabilized, local governments have been orderly progressing in their efforts with debt management, risks in key areas have been gradually resolved, and the foundation for safe development has been consolidated.

In the next stage, as various regions and departments intensify the implementation of policy measures, the effects of these policies are expected to continue to be felt. However, it must also be recognized that the external environment remains complex and severe, with the internal driving forces of the economy still needing to be strengthened further. We must further enhance our sense of responsibility and urgency, make full use of the comprehensive package of incremental policies, maximize policy effectiveness and promote a favorable economic rebound. Thank you.