Economic Daily:

The national economy operated smoothly in the first eight months of this year. Based on the current performance, what is your outlook for the future economic trend? Thank you.

Fu Linghui:

Thank you for your question. China's economic trajectory is of great public interest, because it not only affects the needs of China's economic and social development, but also has a significant impact on the world economy. I have observed that, since the beginning of this year, major international organizations have generally projected that global economic growth in 2026 will be lower than last year. According to major international organizations, these downward revisions for global growth stem mainly from geopolitical conflicts in the Middle East, volatility in the global energy market, and a rebound in global inflation. While revising down global growth projections, some international organizations have raised their growth expectations for China, reflecting confidence in China's economic development. Looking ahead, despite pressures and challenges, the fundamentals of China's long-term economic growth remain unchanged, and the momentum and vitality for development are accumulating and strengthening. The economy is expected to maintain stable operation and progress toward innovation-driven and high-quality development, supported by the following aspects:

First, China's economy faces certain aggregate and structure pressures, but these difficulties can be overcome through concerted efforts. Since the beginning of this year, the complex and volatile international environment has brought downward pressure on global growth, forcing many countries into difficult choices trade-offs between promoting growth, curbing inflation and stabilizing markets. In China, fixed asset investment has declined to some extent due to multiple factors, adding some pressure to aggregate demand. Since March, fluctuations in the international energy market have impacted the production of some domestic industries and enterprises and undermined the stability of industrial and supply chains. However, it should be recognized that most of these problems and difficulties are temporary and transitional, and can be overcome with effort. In the face of these challenges, all regions and departments have stepped up efforts to expand domestic demand and bolster business support, and the effects are gradually taking hold. For example, since the beginning of this year, we have actively promoted large-scale equipment upgrades and trade-ins of consumer goods. In the first eight months, investment in equipment and instruments increased by 9.3% year on year, significantly outpacing overall investment. Retail sales of communication equipment by entities above designated size increased by 16.3%, underscoring the effectiveness of the consumer goods trade-in policy. Furthermore, to ensure the energy needs of enterprises, China has increased its efforts to guarantee energy supply. In the first eight months, crude oil production by industrial enterprises above designated size increased by 0.9% year on year, with the total output reaching a record high for the period.

Second, the pattern of stable economic operation in China remains unchanged, and the trend of upgrading and optimization has been consolidated. Despite the difficulties and challenges, thanks to the concerted efforts of all parties, China's economy has maintained stable operation and is showing positive momentum. In terms of growth, from January to August, the value added of industrial enterprises above designated size and the service sector production index increased by 5.3% and 4.7%, respectively. China's economic growth rate is expected to continue outpacing that of major developed economies. As a super-large scale economy, achieving such growth is no easy feat. In terms of employment and prices, the surveyed urban unemployment rate remained flat year on year from January to August, and the core CPI growth rate remained generally stable. The employment and price situation remained generally stable, providing favorable conditions for the smooth operation of the economy. In terms of the balance of payments, China's foreign trade maintained rapid growth, and foreign exchange reserves remained stable at over $3.4 trillion. In terms of development quality, new growth drivers have gained momentum, industrial upgrading has advanced and high-quality development has been steadily promoted. From January to August, the value added of high-tech manufacturing increased by 14.2% year on year, the production index of information transmission, software and IT services increased by 10.4%, and sectors including AI and new energy products posted robust growth.

Third, China has stepped up counter-cyclical adjustments and continued deepening of reform and opening up, which will enhance the vitality and momentum of economic development. The CPC Central Committee attaches great importance to the difficulties and challenges facing the economy and has made clear plans and arrangements for economic work and the promotion of high-quality development. Recently, relevant departments have earnestly implemented the decisions and arrangements of the CPC Central Committee, worked to make macroeconomic policies more forceful and effective, and accelerated fiscal spending and the use of bond funds. They have advanced projects for implementing major national strategies, enhancing security capacity in key areas, and carrying out large-scale equipment upgrades and consumer goods trade-in programs. Efforts have also been stepped up to build a unified national market, comprehensively address rat-race competition, and expand opportunities for mutually beneficial international economic and trade cooperation. As these measures are gradually implemented, they will help create synergy among policies and bolster the economy's upward momentum. In terms of monthly changes, some positive factors continued to accumulate. In August, compared with the previous month, the growth rates of value-added at industrial enterprises above the designated size and that of imports and exports accelerated by 0.7 and 0.6 percentage point, respectively, and the year-on-year increase in CPI expanded by 0.3 percentage point.

Overall, China's economy is expected to remain stable, with the quality of economic development continuing to improve steadily. At the same time, it should be noted that risks and challenges remain on the road ahead. The external environment is complex and severe, and pressures associated with domestic structural adjustment persist. Sustained efforts are still needed to improve economic performance. In the next stage, it is essential to thoroughly implement the decisions and arrangements of the CPC Central Committee and the State Council, maximize the effectiveness of macro policies, deepen reform and opening up, accelerate the shift from old and to new growth drivers, and strengthen the endogenous momentum of economic development. Thank you.