Jimu News:

We have noticed that some economic indicators fluctuated in April compared to March. Is this due to seasonal factors or does it reflect a certain changing trend? How should we view the trajectory of China's economy going forward? Thank you.

Fu Linghui:

Thank you for your questions. I would like to invite Ms. Wang to answer your questions.

Wang Guanhua:

Thank you for your questions. This year marks the start of the 15th Five-Year Plan period, and all sectors are paying close attention to the trends in China's economy. In the first quarter, the economy got off to a good start. Based on the data recently released for April, the economy continued its trend toward innovation- and quality-oriented development, demonstrating strong resilience and vitality in a complex and ever-changing external environment. This situation has not come easily. Regarding the economic trends in the next stage, we should take a comprehensive and dialectical view. While recognizing internal and external pressures and challenges in economic operations, we should be more aware that the internal driving force for the steady and positive economic development has not changed and will not change. We have opportunities for industrial upgrading brought about by the development of new quality productive forces, the dynamism and vitality stimulated by further comprehensive and in-depth reforms, and the policy reserves and work preparations to address risks and challenges. We have a good foundation and conditions for promoting steady and positive economic development.

First, despite facing new difficulties and challenges at home and abroad, the momentum of steady growth for the domestic economy remains unchanged. The slowdown in the growth rate of some indicators in April is a normal fluctuation between months. Judging from the cumulative indicators, macro indicators and some structural indicators, the steady growth momentum for China's economy has not changed. In the first four months of this year, the value added of industrial enterprises above designated size and the Index of Service Production increased by 5.6% and 4.9% year on year, respectively. The total value of imports and exports of goods increased by 14.9%, and retail sales of services increased by 5.6%. At the end of April, foreign exchange reserves exceeded $3.4 trillion. The surveyed urban unemployment rate remained stable, energy supply increased steadily, and people's basic living needs and secure development were well safeguarded. China is a super-large economy. When observing its economic performance, the key is to look at the overall situation and trend. China's economy has long been advancing by surmounting numerous difficulties and obstacles, and has also been actively adjusting itself by recognizing, responding to and seeking changes. After many years of development, we have gained a more solid material and technological foundation, a more resilient industrial system and a broader domestic market, enhancing the resilience and flexibility of economic development. These facts demonstrate the stable foundation, numerous advantages, strong resilience and huge potential of the Chinese economy, and also reflect the confidence and strength to maintain stable economic operation in the next stage. This is the first point I want to emphasize.

The second supporting factor comes from the cultivation and expansion of new growth drivers and new advantages, which has opened up space and accumulated strength for high-quality development. The performance of the Chinese economy demonstrates its growth resilience and also reveals profound changes toward innovation- and quality-oriented development. In recent years, China's innovation achievements and major breakthroughs have attracted worldwide attention. Technological innovation has driven the upgrading of industries, and new growth drivers such as advanced manufacturing, the modern service industry and green and low-carbon industry have emerged continuously. Many emerging industries have been built from scratch, grown in size and become stronger, gradually becoming key pillars for high-quality development. For example, the equipment manufacturing industry has been the most outstanding sector in China's manufacturing development for many consecutive years. In the first four months of this year, the equipment manufacturing industry's share of the value added of industrial enterprises above designated size rose to 35.7%, contributing more than 50% to the growth of the value added of industrial enterprises above designated size. On a monthly basis, with the growth rate accelerating month by month, and the contribution share increasing, the equipment manufacturing industry has effectively played a key role in stabilizing and supporting the economy. As another example, the digital economy and artificial intelligence have shown strong spillover effects. In addition to directly boosting investment in industries such as electronics, computing power enhancement and servers, they have also driven coordinated growth in upstream industries such as chemicals and electricity that provide raw materials and basic energy security along the industrial chain. China's green and low-carbon industries are also booming, and the international competitiveness in fields such as new energy vehicles, photovoltaics and lithium batteries continues to improve. In addition to these performances in the production sector, similar characteristics have also been observed in the consumption and investment sectors. The consumer market is expanding from the consumption of goods to services, and from meeting basic needs to pursuing quality experiences. Emerging fields such as high-end equipment, green energy and intelligent manufacturing continue to see an expansion in investment and production capacity. The cultivation and development of these new growth drivers is not something that can be achieved overnight or in one fell swoop, but rather a process of long-term efforts and gradual accumulation, and the result of the combined driving forces of policy guidance, market demand and technological innovation. This profound transformation is reshaping the driving force of China's development momentum and continuously enhancing the resilience and sustained momentum for high-quality development.

The third factor is the sustained combined effects of macroeconomic policies, which will safeguard economic operations. The policies of implementing major national strategies and building up security capacity in key areas as well as promoting large-scale equipment renewals and consumer goods trade-ins deployed by the CPC Central Committee and the State Council are being promoted on schedule. At the same time, the central government budgetary investment, ultra-long-term special treasury bonds and local government special-purpose bonds are also being accelerated. Recently, the focus has been on high-quality development, with a series of policies introduced to promote the expansion and upgrading of the service industry, ensure the security of the industrial and supply chains, deepen the reform of the investment approval system, and regulate industry order. Some of these policies have already begun to take effect, while the effects of others will continue to emerge. The meeting of the Political Bureau of the CPC Central Committee held at the end of April made comprehensive arrangements for the economic work in the next stage, and all regions and departments are accelerating the implementation and strengthening policy coordination. Overall, China has a rich toolbox of macroeconomic policies, with ample means and space for cross-cyclical and counter-cyclical adjustments. The precision and effectiveness of policy implementation are constantly improving, equipping China with the conditions and capabilities to cope with risks and challenges.

Of course, we are also keenly aware that there are still some new situations and old problems in the current economic operation, such as the deepening impact of changes in the external environment, the prominent contradiction between strong supply and weak demand in the domestic market, and the relatively difficult production and operation conditions facing some industries and enterprises. These difficulties and challenges stem from both the volatile and turbulent international environment and the key challenges that need to be addressed continuously during the process of domestic economic transformation and upgrading. In the next step, we will make full and effective use of macroeconomic policies, and implement targeted measures to enhance the endogenous driving force for economic development. Thank you.