SCIO briefing on the national economic performance
of the first quarter of 2021
Beijing | 10 a.m. April 16, 2021


The State Council Information Office (SCIO) held a press conference in Beijing on Friday about the national economic performance in the first quarter of 2021.

Speaker

Liu Aihua, spokesperson of the National Bureau of Statistics (NBS) and director general of the Department of Comprehensive Statistics of the NBS

Chairperson

Shou Xiaoli, deputy head of the Press Bureau of the State Council Information Office (SCIO) and spokesperson of the SCIO

Read in Chinese

Speaker:

Liu Aihua, spokesperson of the National Bureau of Statistics (NBS), director general of the Department of Comprehensive Statistics of the NBS

Chairperson:

Shou Xiaoli, deputy head of the Press Bureau of the State Council Information Office (SCIO) and SCIO spokesperson

Date:

April 16, 2021


Shou Xiaoli:

Ladies and gentlemen, good morning. Welcome to this press conference held by the State Council Information Office (SCIO). Today's press conference is a regular briefing on China's economic data. We are delighted to be joined by Ms. Liu Aihua, spokesperson of the National Bureau of Statistics (NBS) and director general of the Department of Comprehensive Statistics of the NBS. Ms. Liu will introduce details concerning China's economic performance in the first quarter of 2021 and answer your questions. Now, let's give the floor to Ms. Liu.

Liu Aihua:

Thank you. I'll start by briefing you all on China's economic performance in the first quarter of this year and then take your questions. The national economy has seen a good start in the first quarter. Faced with the impact of the COVID-19 pandemic during winter and spring as well as uncertainties in the external environment, local authorities and government departments have all worked under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, faithfully implemented the decisions and plans of the CPC Central Committee and the State Council, and consolidated and expanded the progress on epidemic prevention and control and socioeconomic development. Macro policies are being implemented in a scientific and targeted manner. As a result, China's national economy delivered a stable performance with a consolidated foundation and a good momentum of growth. The demand of production was expanded, market vitality improved, employment and consumer prices remained stable, and people's well-being was fully guaranteed. The national economy has seen a good start to the year.

According to preliminary estimates, gross domestic product (GDP) in the first quarter reached 24,931.0 billion yuan, up by 18.3% year on year at comparable prices, or up by 0.6% compared with the fourth quarter of 2020 and 10.3% compared with the first quarter of 2019, with an average two-year growth of 5.0%. By industry, the value added of the primary industry was 1,133.2 billion yuan, up by 8.1% year on year, or an average two-year growth of 2.3%; that of the secondary industry was 9,262.3 billion yuan, up by 24.4% year on year, or an average two-year growth of 6.0%; and that of the tertiary industry was 14,535.5 billion yuan, up by 15.6% year on year, or an average two-year growth of 4.7%. On one hand, the year-on-year GDP growth of 18.3% in the first quarter was affected by such unique factors as the low base figure of last year and the increased working days due to staff staying put during the Spring Festival. On the other hand, the quarter-on-quarter growth of 0.6% in the first quarter, with the average two-year growth reaching 5.0%, demonstrated the steady recovery of the national economy.

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First, the overall agricultural production was steady, and pig production recovered significantly. 

In the first quarter, the value added of agriculture (crop farming) witnessed a year-on-year increase of 3.3%, with an average two-year growth of 3.4%. With the current favorable climatic conditions in major farming areas, spring ploughing and sowing progressed well, and the winter wheat grew slightly better than average. In the first quarter, the output of pork, beef, mutton and poultry was 22 million metric tons, up by 21.4% year on year. Of this total, pork output was up by 31.9%, milk was up by 8.5% and eggs were down by 2.1%. Pig production recovered significantly. At the end of the first quarter, the number of pigs registered in stock was 415.95 million, up by 29.5% year on year, among which 43.18 million were breeding sows, up by 27.7%. 

Second, industrial production rebounded steadily, and the manufacturing industry demonstrated strong growth.

The total value added of industrial enterprises above the designated size grew by 24.5% year on year in the first quarter of 2021, or up by 2.01% quarter on quarter, with an average two-year growth of 6.8%. Of this total, the total value added of industrial enterprises above the designated size in March increased by 14.1% year on year, up by 0.60% month on month. An analysis by type of ownership showed that in the first quarter, the value added of state holding enterprises was up by 16.9% year on year; that of share-holding enterprises was up by 23.7% year on year; that of enterprises funded by foreign investors or investors from Hong Kong, Macao and Taiwan was up by 29.2% year on year; and that of private enterprises was up by 29.7% year on year. In terms of sectors, the value added of mining increased by 10.1% year on year, with an average two-year growth of 4.0%; that of manufacturing increased by 27.3% year on year, with an average two-year growth of 6.9%; and the production and supply of electricity, thermal power, gas and water increased by 15.9% year on year, with an average two-year growth of 4.8%. The value added of equipment manufacturing and high-tech manufacturing increased by 39.9% and 31.2% year on year, respectively, with average two-year growth of 9.7% and 12.3%, respectively. Specifically, the production of new-energy vehicles, industrial robots, excavating and shoveling machinery, microcomputers and integrated circuits all witnessed year-on-year growth of over 60%, with the average two-year growth exceeding 19%. In March, the Manufacturing Purchasing Managers' Index (PMI) stood at 51.9%, staying above the threshold for 13 months in a row; and the Production and Operation Expectation Index was 58.5%.

From January to February, profits from industrial enterprises above the designated size reached 1,114.0 billion yuan, 2.79 times that of the first two months of last year, or an average two-year growth of 31.2%; and the profit rate of the business revenue of industrial enterprises above the designated size was 6.60%, which was 3.15 percentage points higher than that of the first two months in 2020.

Third, the service sector experienced restorative growth, and market expectations were positive.

The first quarter witnessed a steady recovery of the service sector. Of this total, the value added of transportation, storage and postal services and that of real estate services grew by 32.1% and 21.4% year on year, respectively, with average two-year growth of 6.6% and 6.8%, respectively. In March, the Index of Services Production grew by 25.3% year on year, with an average two-year growth of 6.8%. In the first two months, business revenue of service enterprises above the designated size grew by 37.8% year on year, with an average two-year growth of 10.0%. Of this total, the business revenue of information transmission, software and information technology services and that of scientific research and technology services grew by 35.0% and 47.8% year on year, respectively, with average two-year growth of 17.4% and 11.5%, respectively. In March, the Business Activity Index for services stood at 55.2%, which was 4.4 percentage points higher than that in February. The Business Activity Index for railway transportation, air transportation, telecommunication, broadcast, television and satellite transmission services, software and information technology services, monetary and financial services stayed within the high expansion range of 60.0% and above; the Business Activity Index for accommodation, leasing and business services and resident services hit hard by the spread of COVID-19 in some areas at the beginning of the year rebounded to the expansion range. From the perspective of market expectations, the Business Activity Expectation Index for services stood at 62.9%, remaining within the high expansion range of 60.0% and above for two consecutive months.

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Fourth, market sales improved gradually, and online retail sales grew rapidly.

In the first quarter, the total retail sales of consumer goods reached 10,522.1 billion yuan, up by 33.9% year on year, or up by 1.86% quarter on quarter, with an average two-year growth of 4.2%. Specifically, in March, the total retail sales of consumer goods reached 3,548.4 billion yuan, up by 34.2% year on year, 0.4 percentage point higher than that in the first two months, with an average two-year growth of 6.3%, or up by 1.75% month on month. Analyzed by different areas, the retail sales of consumer goods in urban areas reached 9,134.5 billion yuan, up by 34.6% year on year, or an average two-year growth of 4.3%; and that in rural areas rose by 29.4% year on year to 1,387.5 billion yuan, with an average two-year growth of 3.2%. Grouped by consumption patterns, the income of catering was 1,059.6 billion yuan, up by 75.8% year on year, or an average two-year decline of 1.0%; and the retail sales of goods was 9,462.5 billion yuan, up by 30.4% year on year, or an average two-year growth of 4.8%. Grouped by categories, for the retail sales of goods by enterprises above the designated size in the first quarter, the year-on-year growth rates of 18 categories of goods exceeded 10%. Specifically, the retail sales of sports and recreational goods and communication equipment grew by 45.2% and 42.4% year on year, respectively, with average two-year growth of 17.4% and 17.1%, respectively. Online retail sales reached 2,809.3 billion yuan, up by 29.9% year on year, with an average two-year growth of 13.5%. Specifically, the online retail sales of physical goods totaled 2,306.7 billion yuan, up by 25.8% year on year, with an average two-year growth of 15.4%, accounting for 21.9% of the total retail sales of consumer goods, which was 1.2 percentage points higher than that in the first two months of this year.

Fifth, fixed asset investment recovered steadily and investment in high-tech industries and social sectors grew quickly.

In the first quarter, the investment in fixed assets (excluding rural households) reached 9.5994 trillion yuan, up by 25.6% over last year, or up by 2.06% quarter on quarter with an average two-year growth of 2.9%. In March, the investment in fixed assets (excluding rural households) grew by 1.51% month on month. Specifically, in the first quarter, the investment in infrastructure was up by 29.7% year on year, an average two-year growth of 2.3%; manufacturing was up by 29.8% year on year, an average two-year decrease of 2.0%; and real estate development was up by 25.6% year on year, an average two-year growth of 7.6%. The floor space of commercial buildings sold reached 360.07 million square meters, up by 63.8% year on year, an average two-year growth of 9.9%. The total sales of commercial buildings was 3.8378 trillion yuan, up by 88.5% year on year, an average two-year growth of 19.1%. By industry, investment in the primary industry increased 45.9% year on year, with an average two-year growth of 14.8%; in the secondary industry it was up by 27.8% year on year, with an average two-year decrease of 0.3%; and the tertiary industry grew by 24.1% year on year, an average two-year growth of 4.0%. Private investment went up by 26.0% year on year, an average two-year growth of 1.7%. Investment in high-tech industries grew by 37.3% year on year, an average two-year growth of 9.9%. Specifically, the investment in high-tech manufacturing and high-tech services grew by 41.6% and 28.6% year on year, respectively, with average two-year growth of 10.7% and 8.2%, respectively. In terms of high-tech manufacturing, investment in the manufacturing of medical equipment, measuring instruments and meters, and in the manufacturing of computers and office devices grew by 50.0% and 49.5% year on year, respectively, with average two-year growth of 9.1% and 24.2%, respectively. In terms of high-tech services, investment in testing services and in research, development and design services went up by 55.7% and 48.2% year on year, respectively, with average two-year growth of 14.8% and 21.5%, respectively. Investment in social sectors increased 31.7% year on year, with an average two-year growth of 9.6%. Specifically, investment in the health sector and education sector went up by 50.9% and 27.0% year on year, respectively, with average two-year growth of 22.3% and 10.4%, respectively.

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Sixth, imports and exports of goods grew noticeably and the trade structure continued to improve.

In the first quarter, the total value of imports and exports of goods was 8.4687 trillion yuan, an increase of 29.2% over the previous year. The total value of exports was 4.6140 trillion yuan, up by 38.7% year on year; and that of imports was 3.8547 trillion yuan, up by 19.3% year on year. The trade balance was 759.3 billion yuan in surplus. In March, the total value of imports and exports of goods was 3.0228 trillion yuan, up by 24.0% year on year. The total value of exports was 1.5554 trillion yuan, up by 20.7% year on year; and that of imports was 1.4674 trillion yuan, up by 27.7% year on year. The trade structure continued to improve. In the first quarter, the imports and exports of general trade accounted for 61.2% of the total value of imports and exports, 1.3 percentage points higher than the same period of the previous year. The imports and exports by private enterprises accounted for 46.7% of the total value of imports and exports, 4.4 percentage points higher than the same period during the previous year. 

Seventh, consumer prices maintained the same level year on year and producer prices for industrial products went up year on year.

In the first quarter, consumer prices maintained the same level as the previous year. In March, consumer prices were up by 0.4% year on year, and down by 0.2% in February; or down by 0.5% month on month. In the first quarter, consumer prices fell by 0.1% in urban areas and maintained the same level in rural areas. Grouped by commodity categories, the prices of food, tobacco and alcohol went up by 0.6% year on year; clothing was down by 0.2%; housing was down by 0.2%; articles and services for daily use were down by 0.1%; transportation and communication fell by 1.4%; education, culture and recreation were up by 0.3%; medical services were up by 0.3%; and other articles and services were down by 1.1%. In terms of food, tobacco and alcohol prices, the price of grain went up by 1.5%, fresh vegetables were up by 4.8%, and pork was down by 12.5%, or down by 18.4% in March with a decline expanded by 3.5 percentage points compared with February. In the first quarter, the core CPI excluding the price of food and energy stayed the same as that of last year.

In the first quarter, the producer prices for industrial products went up by 2.1% year on year. Specifically, the prices in March went up by 4.4% year on year, 2.7 percentage points higher than the growth in February, or up by 1.6% month on month. In the first quarter, the purchasing prices for industrial products went up by 2.8%. Specifically, the prices in March went up by 5.2%, which was 2.8 percentage points higher than the growth in February, or up by 1.8% month on month.

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Eighth, the surveyed urban unemployment rate fell and employment remained generally stable. 

In the first quarter, the newly employed people in urban areas numbered 2.97 million. In March, the surveyed urban unemployment rate was 5.3%, down by 0.2 percentage points compared with February and 0.6 percentage points lower than the same period last year. The surveyed unemployment rate of population with local household registration was 5.3% and that of population with non-local household registration was 5.4%. Specifically, the surveyed unemployment rates of the population aged from 16-24 and from 25-29 were 13.6% and 4.8%, respectively. The surveyed urban unemployment rate in 31 major cities was 5.3%, 0.2 percentage points lower than that in February. In March, employees of enterprises worked 46.9 hours per week on average, up by 0.6 hours compared with February. At the end of the first quarter, the number of rural migrant workers totaled 174.05 million. 

Ninth, residents' income continued to rise and the income growth of rural residents outpaced that of urban residents. 

In the first quarter, the per capita disposable income of residents nationwide was 9,730 yuan, a nominal increase of 13.7% year on year, with an average two-year growth of 7.0%, or a real increase of 13.7% year on year after deducting price factors, with an average two-year growth of 4.5%. In terms of permanent residents, the per capita disposable income of urban residents was 13,120 yuan, a nominal increase of 12.2% year on year and a real increase of 12.3%; and the per capita disposable income of rural residents was 5,398 yuan, a nominal increase of 16.3% year on year and a real increase of 16.3%. In terms of income source, nationwide per capita salary income, net operative income, net property income and net income from transfers saw year-on-year growth of 12.4%, 19.5%, 17.0% and 10.7% in nominal terms, respectively. The per capita disposable income of urban residents was 2.43 times that of rural households, 0.09 lower than the ratio of the same period last year. Median per capita disposable income nationwide was 8,014 yuan, an increase of 12.7%. 

Generally speaking, the national economy in the first quarter continued its stable recovery. However, we must be aware that the COVID-19 pandemic is still spreading globally and the international landscape is complicated with high uncertainties and instabilities. The foundation for the domestic economic recovery is also yet to be consolidated and the long-standing structural problems remain prominent with new situations and issues arising from development. In the next stage, we must follow the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, and continue to consolidate the foundation of economic stability, to build strength for development and to guarantee basic security requirements. We should maintain the consistency, stability and sustainability of macro policies, deepen reform and opening-up and innovation, keep the economy performing within a reasonable range and promote the quality development of the economy in a solid manner. 

That's all for my introduction. Thank you.

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Shou Xiaoli:

Thank you, Ms. Liu for your introduction. The floor is now open for questions. Please identify the media organization you represent before asking your questions.

CCTV:

Ms. Liu, from the data that was just released, we can see that the GDP in the first quarter achieved rapid growth of 18.3%. I would like to ask, what factors contributed to this growth rate? How should we understand the current operation of the overall economy? The first quarter of this year is also the first quarter of the 14th Five-Year Plan (2021-2025) period. What's your comment on China's economic performance for the start of the year? Thank you.

Liu Aihua:

Thank you for your questions. Judging from the main indicators for the first quarter just introduced, it can be said that in this period, despite the tests the pandemic gave rise to in winter and spring and the uncertainties of the external environment, the outcomes we achieved in coordinating the pandemic prevention and control with economic and social development have been consolidated and expanded. On the whole, China's economy has continued to recover steadily, with a positive start. Its characteristics are mainly reflected in five aspects:

First, production demand continues to improve. Because of the low base in the same period last year and the increase in working days as many people stayed put for the Spring Festival, this year's year-on-year growth rate has shown a different trend from previous years. We need to judge the economic situation from multiple angles. Judging from the year-on-year situation, due to the gradual recovery of market demand, the relatively low base of the previous year, and the stay-put celebrations, the main indicators showed double-digit growth. In the first quarter, the GDP increased by 18.3% year-on-year, as did the added value of industrial enterprises above designated size by 24.5%, the total retail sales of consumer goods by 33.9%, fixed asset investment (excluding rural households) by 25.6%, and total imports and exports of goods by 29.2%. The year-on-year growth rate of these indicators was all double-digit. From a quarter-on-quarter perspective, the main indicators continued to grow. In the first quarter, the value added by industrial enterprises above designated size increased by 2.01% from the fourth quarter of the previous year, the total retail sales of consumer goods by 1.86% from the previous quarter, and fixed asset investment by 2.06%. Looking at the average growth rate over the past two years, the GDP in the first quarter increased by an average of 5%, the added value of industrial enterprises above designated size by an average of 6.8%, the total retail sales of consumer goods by an average of 4.2%, the investment in fixed assets by an average of 2.9%, and the average growth rate of the total amount of goods imported and exported was also close to 10%. Therefore, by combining these indicators, it can be said that the overall economy is in stable recovery.

Second, employment and commodity prices are generally stable. In the first quarter, the surveyed unemployment rate in urban areas across the country averaged 5.4%, a year-on-year decrease of 0.4 percentage points. That includes an unemployment rate of 5.3% in March, down 0.6 percentage points year-on-year. In the first quarter, 2.97 million new jobs were created in urban areas across the country, fulfilling 27% of the annual target. In terms of commodity prices, consumer prices in the first quarter remained flat year-on-year. In March, a decline of 0.2% in the previous month turned to an increase of 0.4%, indicating a relatively moderate increase.

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Third, we saw a rapid development of new growth drivers. In the first quarter, the high-tech manufacturing industry above designated size grew by 31.2% year-on-year, with an average increase of 12.3% over two years. The added value of the equipment manufacturing industry increased by 39.9% year-on-year, while the two-year average growth rate was 9.7%. These two growth rates are faster than the overall growth rate of all industries above designated size. Investment in the high-tech industry increased by 37.3% year-on-year, with an average growth rate of 9.9% over two years, which was 7 percentage points higher than the total investment. The output of smart low-carbon products has grown rapidly. In the first quarter, the output of new energy vehicles, industrial robots, and microcomputer equipment increased by 3.1 times, 1.1 times, and 73.6% respectively year-on-year, and the average growth rate over the two years exceeded double digits. New business forms and models continue to emerge. New models such as live-streaming e-commerce, online diagnosis and treatment, and telecommuting are developing well, and online and offline integration is speeding up. The online retail sales of physical goods in the first quarter increased by 25.8% year-on-year, with a two-year average increase of 15.4%, accounting for 21.9% of total consumer goods sales.

Fourth, quality and efficiency have been steadily improved. Let's first look at corporate profits. From January to February, the total profits for industrial enterprises above designated size increased by 1.79 times year-on-year, with an average increase of 31.2% over two years; service industry enterprises above designated size turned losses into profits, achieving a total profit of 169 billion yuan, compared to losing money in the same period last year. Residents' income continued to increase. In the first quarter, the national average per capita disposable income increased by 13.7% year-on-year in real terms, with a two-year average growth rate at 4.5%. Meanwhile, the income of rural residents grew faster than that of urban residents. Additionally, energy consumption per unit of GDP continued to decline, with preliminary calculations showing that energy consumption per unit of GDP in the first quarter fell by 3.1% year-on-year.

Fifth, market expectations are stable and improving. In March, China's Manufacturing PMI was 51.9%, an increase of 1.3 percentage points from the previous month, and was within the boom range for 13 consecutive months; the non-manufacturing business activity index was 56.3%, an increase of 4.9 percentage points; the composite PMI output index was 55.3%, an increase of 3.7 percentage points.

Judging from the above five aspects, we can see that the economic recovery in the first quarter of this year continued and that positive factors are accumulating. At the same time, we also understand that the international pandemic is still raging, the international environment is still complex and severe, the foundation for domestic economic recovery is not yet solid, and some service industries and small and micro-enterprises continue to face additional difficulties with their production and operations. In these aspects, we must continue to follow the deployments of the Central Economic Work Conference and the government work report to further increase the efforts to help enterprises out of difficulties; maintain continuity, stability, and sustainability of macroeconomic policies; and promote steady economic recovery. Thank you.

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Red Star News:

My question is, judging from the statistics of the first quarter (Q1) of 2021, the consumption sector has rebounded significantly. What's your take on the recovery and in what areas has there been a relatively slow recovery? What measures will be taken to continue to expand consumption in the future? Thanks.

Liu Aihua:

Thanks for your questions. Judging from the data released just now, the total retail of consumer goods surged by 33.9% year on year in Q1, with an average two-year growth of 4.2%. Data show that this year, the consumer market is riding the quarterly recovery momentum from last year, showing a rapid rate of recovery. The three characteristics are as follows: 

First, the retail of goods maintained relatively rapid growth. Sales of goods grew by 30.4% year on year or average two-year growth of 4.8%. For sales of goods by enterprises above the designated size, the year-on-year growth rate in 18 categories of goods exceeded 10%. Specifically, sales of eight categories of goods, including sports, recreational, and communication equipment, increased by an average two-year growth rate of more than 10%.

Second, online sales saw a growing momentum. In Q1, online sales of physical goods reported an average two-year growth of 15.4%, accounting for 21.9% of the total sales of consumer goods.

Third, consumption sectors, such as the catering industry and offline consumption, which were buffered from recovery in the early stages, are now rebounding rapidly. In March, China's catering industry grew at an average two-year rate of 0.9%, which means that the monthly growth rate was higher than that of the same period in 2019 for the first time since 2020. Regarding offline consumption, sales of goods in physical retail shops above the designated size rose by 42.2% year on year in Q1, with an average two-year growth of 4.5%, 0.4 percentage points higher than that of the Jan-Feb period, showing a speedy recovery.

During the Tomb-Sweeping Day holiday, Chinese residents demonstrated a strong consumer demand for tourism and movies. Data from relevant departments shows that the total number of domestic trips topped 102 million during the holiday, recovering to 94.5% of the pre-COVID-19 level. From April 2 to 5, the number of railway passenger journeys rose by 225.8% compared with last year's Tomb-Sweeping Day holiday, recovering to 92.4% of 2019 levels. In the film market, China generated more than 800 million yuan in box office revenue during the three-day Tomb-Sweeping Day holiday, a record high in the same period compared to previous years.

From these numbers, we can see that there has been a rapid recovery in both online and offline sales of goods as well as in sectors such as catering and tourism, which had previously seen a relatively slow recovery and raised many concerns. Influenced by last year's base figures, the year-on-year growth was relatively rapid. With total sales of consumer goods dropping by 19% in Q1 of last year, on the basis of such a low base figure, sales of consumer goods registered a relatively fast growth rate of over 30%. There are also other contributing factors. The improved consumption environment boosted residents' confidence. Residents with an increased income demonstrated their strong consumption capacity. Favorable policies for expanding domestic demand and promoting consumption boosted the sale of major consumer goods. All of these are the reasons behind the rapid growth of the consumer market in Q1.

You just asked about what future trends we're likely to see for the recovery of the consumer market. Generally speaking, since last year, the consumer market has stood the severe test of the pandemic. The advantages of a mega-scale market are obvious and the momentum of upgraded consumption has remained unchanged. In the future, as the economy recovers steadily and residents' income continues to increase, there will be a greater impetus for promoting consumption capacity. China enhanced its responses to COVID-19 and took more targeted measures for pandemic prevention and control, which were also helpful in improving the consumption environment. Policies for expanding domestic demand and promoting consumption are paying off. The building of a new "dual circulation" development pattern that allows the domestic and overseas markets to reinforce each other with the domestic market as the mainstay, is speeding up. All these will support the steady recovery of the consumer market. At the same time, we should notice that China is still facing pressure from imported cases as well as the resurgence of outbreaks at home, which may affect consumer confidence. So we need to continue to coordinate the work of pandemic prevention and control and the economic and social development and improve the urban-rural logistics system to offer more favorable conditions for consumption. We will also work to maintain stability in employment, increase people's income and ensure that relevant policies are implemented in detail to sustain the steady consumption recovery. Thanks.

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Shenzhen Special Zone Daily and Dute News: 

According to the statistics released, CPI growth was consistently negative during the first two months of this year, only becoming positive in March for the first time, and thus showed year-on-year flat growth in the first quarter. Analysts predicted that inflation would gradually grow in the next one or two quarters. What do you expect in terms of the CPI trend for the whole year? Thank you.  

Liu Aihua:

Thank you for your question. Just as you mentioned, the overall price levels in the first quarter were steady and the CPI showed flat year-on-year growth. The CPI shifted from a negative growth of 0.2% in February to positive growth of 0.4% in March. The trend of prices is of great concern among the public. Generally speaking, the CPI is currently flat year on year. The growth rate of 0.4% in March was also a mild one. Analyzed structurally, the main factor that led to the positive growth was the price increases of gasoline and diesel, which belong to non-food categories. In March, the prices of both gasoline and diesel increased by 12% year on year. Driven by the price rise of these two energy products, the growth rate of CPI in March turned positive and reached 0.4%. Looking at other commodity categories, price rises, including that of food, were all considered moderate and some prices even fell. Food prices in March declined by 0.7% year on year. As for the price of pork, which is of great concern, decreased by 18.4% in March.  

Looking to the future, what do we forecast in terms of CPI trends for the whole year? First, from the perspective of specific categories, the public is more concerned about the prices of industrial consumer goods, which grew by 1% in March year on year. As for future trends, since we have complete industrial systems, sufficient manufacturing capacity, and effective and forceful macro-control measures in the field, the factors leading to soaring prices do not exist in terms of supply and demand. Second, regarding food prices, the price of pork has played a big role in propelling food price growth over the past two years. However, it has dropped year on year for several months consecutively, falling by 18.4% year on year. Currently, with the implementation of measures to guarantee supply and stabilize prices, our hog production capacity has recovered remarkably. The live hog stocks had grown by 29.5% year on year by the end of the first quarter, an increase of six quarters in a row, indicating a rapid recovery. From this perspective, the price of pork is showing a continuous downward trend. In addition, grain prices were also relatively stable with grain production enjoying a good start this year and winter wheat growing a little better than previous years. From this perspective, food security can be guaranteed. Therefore, whether it's from pork or grain prices, there is little pressure for CPI to grow. Third, as for service prices, since the service industry has recovered steadily both in supply and demand, the price too will restore gradually with the recovery of supply and demand and may show a moderate growth trend. 

Based on the above-mentioned three aspects, including the prices of industrial consumer goods, food, and service, the CPI through the whole year is expected to remain in a moderate range of growth. Thank you.

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CNBC:

I have two questions. First, investment in the manufacturing industry during the first quarter increased by 29.8% year-on-year, registering an average two-year decrease of 2%, and consumption in the first quarter exceeded expectations. Will the manufacturing investments impact future economic growth, employment, and consumption, and what are the factors involved? Second, China has promised to strive for peak carbon dioxide emissions by 2030. Will the economy be impacted to achieve this goal? Thank you.

Liu Aihua:

Thank you for your questions. Your first question is a very targeted one. In the process of rapid recovery of overall demand, there are indeed areas that have yet to return to pre-epidemic levels, including investments in the manufacturing sector. An average two-year drop of 2% means that current manufacturing investments are about 96% of before the COVID-19 epidemic and that manufacturing investments haven't returned to pre-epidemic levels. There are many factors involved. On the one hand, this shows that enterprises are facing some difficulties in production and management. They are still recovering and have some concerns regarding investment. On the other hand, enterprises are also observing the overall market, and the factors conducive to the recovery of manufacturing investments are slowly accumulating and increasing. For example, profits for industrial enterprises of designated size in January and February increased by 1.79 times, a significant growth year-on-year, and the average two-year growth reached 31.2%. It can be said that enterprise profits are improving.

This year marks the first year of the 14th Five-Year Plan period (2021-2025), and some major projects are being arranged, providing private enterprises with more and more opportunities to participate. There are many investment opportunities in terms of new infrastructure and new urbanization initiatives and major projects, the transformation of traditional industries, and the upgrading of emerging industries. Therefore, I think, with the overall recovery of the economy and improvement in enterprises' profits, the confidence of enterprises will slowly be enhanced and the room for upgrading of the manufacturing industry remains large. We are still very confident in the recovery of manufacturing investments in the future.

Your second question is about the impact of peak carbon dioxide emissions. In general, promising to strive for peak carbon dioxide emissions by 2030 indicates our confidence in green development. Peaking carbon dioxide emissions will certainly promote energy production and consumption toward clean and low-carbon development, and we are working towards it. Energy consumption per unit GDP decreased by 3.1% in the first quarter, suggesting that we have taken the correct actions in this regard, which is very beneficial to the green development of the economy. Thank you.

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Hong Kong Bauhinia Magazine:

The International Monetary Fund (IMF) recently raised its economic growth projection for China in 2021, predicting that its economy will grow by 8.4%. What is the NBS' expectation for China's economic outlook of this year? Thank you.  

Liu Aihua:

Thank you for your question. The IMF upgraded its growth projection for China in 2021, lifting its economic growth to 8.4%, which shows the confidence and expectation of the international community for China's economic development throughout the year. As far as we are concerned, the economy is expected to maintain a consolidated and positive momentum for steady growth, which can be seen in the following three aspects:

First, internal driving forces have been strengthening. Consumption has been improving steadily due to increased personal incomes, improvement in the consumption environment, and implementation of policies. In March, the total sales of social consumer goods increased by 34.2% year on year, 0.4 percentage points higher than that of January and February. The hotel and catering industries, which were affected earlier, have been gradually recovering. March revenue in the catering industry was, for the first time, higher than the level of the same period in 2019, returning to pre-pandemic levels. Moreover, the composition of investment witnessed a continuous improvement in the first quarter, with the average investment in the high-tech industry and the social domain in the past two years up 9.9% and 9.6% respectively. Growth rates in both were close to 10%, higher than the overall investment growth. Such growth was actually not insignificant. Going forward with facilitating factors such as policies, programs, and funding are gradually put in place or implemented, investment is expected to maintain a steady recovery. Additionally, the growth of imports also accelerated in March, jumping 27.7% year on year, a figure that is higher than the growth of exports for the first time this year. This reflects a strong and consolidated recovery of domestic demand. 

Second, supply quality has been improving. Industrial restructuring has been on the rise. According to recently released data, both production and investment in the high-tech industry witnessed a faster growth than average. Additionally, the capacity utilization rate has been increasing, with the national industrial capacity utilization rate reaching 77.2% in the first quarter, up 9.9 percentage points year on year and the highest level in the same period since 2013. The service industry has also seen a steady recovery. The ratio of the added value in the service sector in GDP hit 58.3% in the first quarter, 21.1 percentage points higher than that of the secondary industry. The contribution rate in the service sector in terms of economic growth reached 50.9% and it continued to play its role as the major driving force for growth. Cutting edge services, including information transmission, software and information technology services, grew by 17.1% in the past two years.

Third, market vitality has been unleashed. Macro-policies have been put in place and continue to provide market entities with relief and necessary support. We have improved and implemented tax reduction policies in a bid to help market entities recover and energize them. The number of market entities has seen a rapid increase, with double-digit growth in market entities estblished daily. Enterprise projection has witnessed a good momentum of steady growth. In March, the manufacturing production and business activities expectation index and the non-manufacturing business activities expectation index were both around 60%, maintaining relatively high levels.

The above three aspects, whether in terms of the internal driving forces of the economy, the quality of supply, or market entities that we're concerned about, have all been improving and enhancing. The recovery in these aspects, together with a solid material foundation, complete industrial system, and abundant human resources, all of which are advantages that China has maintained for a long period, will synergize demand and supply, and provide micro-entities with relief. Overall, we are confident that our economic recovery will maintain the current momentum throughout the year, and I think we have the foundation and conditions to achieve a consolidated and positive momentum for steady growth.

Due to the pandemic, as we mentioned earlier, the economic environment is still facing uncertainties and instabilities. We have to be aware of such circumstances, as the foundation for domestic recovery is still yet to solidify and the growth of some enterprises in the service sector as well as among small and micro-businesses remains slow. In the wake of the new situation and problems in economic recovery, we will continue to follow the deployments in the government work report, as well as continue to consolidate the foundation for steady growth, ramp up efforts to achieve progress, and maintain the bottom line for ensuring economic growth to keep economic performance within the proper range throughout the year. 

Thank you.

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National Business Daily:

Data for the seventh nationwide population census has not yet been released. When will it be available to the public? Thank you.

Liu Aihua:

Thank you for your attention to the population census. At present, all sectors of society are very concerned about the results of the seventh national census, and we also hope that everyone will receive new data about the country's population as soon as possible. This year, we will add more detailed information based on the sixth national census while significantly increasing the number of census bulletins to offer more details to the public. Therefore, we will make efforts to expedite the release of the final data.

Cover News:

I have two questions. The first is regarding the price of pork. What are your estimations for the future trends of pork prices following the recent dive in prices, which fell back to a dozen yuan for half a kilo? Will the price remain stable as many consumers wish? The second question is about the nationwide employment situation during the first quarter of 2021. More than 9 million students will graduate from colleges this year. What are the employment prospects for them? Thank you.

Liu Aihua:

Thank you for your questions. First, I talked about the price of pork just now. According to the current situation, pig production in China has recovered thanks to a series of supporting measures to stabilize supplies and price. In the first quarter, pig stocks grew 29.5% year on year and kept rising for six consecutive quarters. Large price drops were seen in some regions due to the recovery of pig production. CPI shows that the prices fell 18.4% year on year in March and also decreased month on month. The price will continue to fall as the pork production and supply situation continues to improve.

Your second question regards employment, which is so far generally stable this year. In the first quarter, the surveyed average urban unemployment rate was 5.4%, a decrease of 0.4 percentage point year on year, while the rate for March was 5.3%, falling by 0.6 percentage point year on year. Judging from current unemployment rate data, the current employment status is relatively stable. But just as you said, the overall employment pressure is relatively high this year, and structural imbalance is gradually becoming apparent in the process of economic recovery.

First, the total pressure still exists. The rural migrant labor population reached more than 170 million in the first quarter, 2.46 million fewer than in the same period in 2019. It can be understood that some enterprises in the service sector, particularly small and medium-sized enterprises, are facing more difficulties in production and operations, and are still in the process of recovery. Therefore, the demand for jobs is being directly affected and is indirectly causing the number of migrant workers in urban areas to be lower than before the pandemic. The surveyed unemployment rate for young people aged between 16 and 24 was 13.6% in March, up from a year earlier, indicating that young people still face challenges in employment. This may be because of the large number of young people pouring into the labor market after the Spring Festival and causing frictional unemployment. To some extent, it also signal that the job market is reviving. However, we need time to solve this problem and the job market pressure does indeed remain.

Furthermore, structural issues have also existed. We have learned through the investigation and research process that many enterprises in coastal industrial provinces and major foreign trade provinces report difficulties in recruiting workers. We recently conducted a survey of over 90,000 industrial enterprises above designated size, which showed that approximately 44% of these enterprises reported recruitment difficulties being the biggest problem they face and that this has reached the highest percentage in recent years. During several investigations, many enterprises reported that it is difficult to recruit ordinary workers, skilled workers, and highly-skilled workers on the frontline. These issues have started to appear during the economic recovery.

Therefore, the pressure on both the total amount and the structure of employment exists simultaneously. For the next step, as the economy continues to recover, we will continue to strengthen policies that prioritize employment and increase assistance to groups who have difficulties finding jobs. We will also gradually solve the problems faced by the employment sector by using employment guarantee services and by expanding market-oriented and socialized recruitment channels.

In general, the current employment situation is generally stable. With the overall recovery of the economy, there are still some conditions that need to be met to maintain both the increase of employment demand and the overall stability of the job market throughout the year. Thank you.

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China National Radio (CNR):

We noticed that in the first quarter, the total sales of commercial buildings amounted to 3,837.8 billion yuan, up by 88.5% year on year. When coupled with the data released today regarding housing prices in March across 70 large and medium-sized Chinese cities, the overall year-on-year increase also continued. How do you evaluate the current property market situation? What impacts will this increase have on the national economy?

Liu Aihua:

Thank you for your question. Regardless of whether it is investment in or sales of real estate this year, these indicators have been affected by the base figures of the same period last year, and most of the indicators are currently showing double-digit growth. Since the beginning of this year, various regions and departments have been closely following the new situation and new problems, and further adhered to the principle of "houses are used for living, not for speculation." With the goal of stabilizing land prices, housing prices, and expectations, a series of powerful and effective measures have been introduced in a timely manner. 

For the next step, with the increase in the construction of affordable rental housing, the development of the long-term rental housing market will gradually be standardized. A new supply pattern for the real estate market with multi-subject supply, multi-channel guarantee, and simultaneous rental and sales will then gradually take shape, which is conducive to promoting a steady and healthy development of the real estate market throughout the year. Thank you.

21st Century Business Herald:

The market has become more concerned with increasing commodity prices. What is the future trend for commodity prices? China has proposed enhancing regulation of the raw material market. What methods might be adopted in the future? Thank you.

Liu Aihua:

Thank you for your question. Recently, under the impetus of various factors such as loose global liquidity, a recovery in market demand, and short-term supply shortages, and so on, there has been a surge in international commodity prices. According to the data from relevant international organizations, during the first quarter, average international energy prices rose by 35.3% from the previous quarter, while the average non-energy price rose by 11.8%, reaching a relatively high level in recent years.

If we look at the recent price changes, we can see that the prices of some raw materials are growing. PPI grew by 0.3%, 1.7%, and 4.4% year-on-year in January, February, and March, respectively, reversing the previous downward trend lasted for nearly one and a half years. A 4.4% year-on-year increase in March was mainly driven by sectors related to oil and metal, with average prices in the oil and metal-related sectors growing by 11.1% and 17.6% year on year respectively. Generally speaking, the structural increase in PPI is mainly driven by the growing prices of means of production, as their average price went up by 5.8% year on year in March. The price for the means of subsistence in March was stable, up 0.1% year-on-year.

As China integrates deeper into the global economy, the price increase of international commodities may have an impact on the prices of some domestic sectors via trade and investment channels. However, judging from the structural features of the current PPI increase, the impact will mainly affect some upstream industries. The influence on downstream industries is yet to be seen. The relationship between supply and demand is the most fundamental element for price changes. Under the current circumstances with the ongoing economic recovery, the quality and capacity of supply are gradually improving, while demand is still recovering. Seen from these aspects, the prices of China's upstream products have no foundation for long-term growth. Thank you.

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China Financial and Economic News:

In recent years, China has made significant efforts to relieve the pressure of market entities. As Premier Li Keqiang said, market entities have provided much support in sustaining positive growth in the domestic economy as well as to meet employment goals in the last year. This year, China continues to adopt multiple measures to serve market entities. What are the major contributions made by vigorous market entities to the stellar economic performance in Q1? How do you see the relationship between the market entities and the country's economic performance? Thank you.

Liu Aihua:

Thank you for your questions. Market entities are the foundation of the market economy. Since last year, China has adopted many macro policies to cut taxes and fees to alleviate the difficulties of market entities and meet their demands. Those policies have been very effective in protecting market entities. From this year's statistics, we can see that the macro-economy is generally recovering and stabilizing, which is supported by the efforts of market entities at the micro-level. Moreover, as production and operations improve, businesses are gaining confidence. We can see this from the many statistics mentioned above, including the production and operations of some micro, small, and medium enterprises (MSMEs). In this year's government work report, China says it will continue to alleviate the difficulties of market entities; ensure continuity, consistency, and sustainability of macro policies; and avoid sharp turns in policy. This shows that China will maintain necessary policy support for market entities to recover. I believe that policy support will not only benefit the macro-economy but also promote higher quality and a higher level of employment.

MSMEs are now seeing better performance in their production and operations. They have also shown stronger confidence. In March, the PMI of small and medium enterprises had returned above the threshold, demonstrating stronger confidence among market entities. As macro policies continue to alleviate their difficulties, market entities, which are supported by their strong resilience, are bound to enjoy better production and operations this year. Thank you.

Shou Xiaoli:

Thank you, Ms. Liu, and friends from the media. This is the end of today's press conference. Goodbye.

Translated and edited by Zhu Bochen, Huang Shan, Xu Xiaoxuan, Wang Qian, Zhang Rui, Zhang Junmian, Cui Can, Mi Xingang, Wang Yanfang, Gong Yingchun, Fan Junmei, Zhang Tingting, Chen Xia, Yan Xiaoqing, Guo Yiming, Li Huiru, David Ball, and Tom Arnstein. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.

/3    Shou Xiaoli

/3    Liu Aihua

/3    Group photo