SCIO briefing on China's economic performance of the first three quarters of 2021

Speaker:

Fu Linghui, spokesperson of the National Bureau of Statistics and director general of the Department of Comprehensive Statistics of the National Bureau of Statistics

Chairperson:

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

Date:

Oct. 18, 2021

Shou Xiaoli:

Ladies and gentlemen, good morning. Welcome to this press conference held by the State Council Information Office (SCIO). This is a regular briefing on China's economic data. Today, we are joined by Mr. Fu Linghui, spokesperson of the National Bureau of Statistics and director general of the Department of Comprehensive Statistics of the National Bureau of Statistics. Mr. Fu will brief you on China's economic performance in the first three quarters of 2021 and then take your questions.

Now, I'll give the floor to Mr. Fu.

Fu Linghui:

Friends from the media, good morning. As usual, I will start by briefing you on economic performance in the first three quarters of the year and then take your questions.

In short, China's economy continued its stable recovery in the first three quarters of the year.

In the first three quarters of the year, in face of the complex and challenging conditions both at home and abroad, all regions and departments have worked under the strong leadership of the Central Committee of the Communist Party of China (CPC) with Comrade Xi Jinping at its core and earnestly implemented the decisions and deployments made by the CPC Central Committee and the State Council. By coordinating epidemic control with economic and social development in a scientific manner, enhancing the cross-cyclical adjustment of macro policies, and effectively coping with the epidemic and floods, China's economy continued to recover. The main macro indicators stayed in an appropriate range. The employment situation was generally stable, and people's income continued to increase. China's international payments remain balanced, while its economic structure was optimized. The quality and efficiency of China's economic performance saw steady growth with the society remaining harmonious and stable.

According to preliminary estimates, the gross domestic product (GDP) in the first three quarters amounted to 82.31 trillion yuan, up 9.8% year on year at comparable prices, with an average two-year growth of 5.2%, a 0.1 percentage point lower than the average two-year growth of the first half of 2021. By quarter, the GDP for the first quarter increased by 18.3% year on year, with an average two-year growth of 5%; for the second quarter 7.9% year on year, with an average two-year growth of 5.5%; and for the third quarter 4.9% year on year, with an average two-year growth of 4.9%. By industry, for the first three quarters, the value added of the primary industry reached 5.14 trillion yuan, up 7.4% year on year, or an average two-year growth of 4.8%. That of the secondary industry was 32.09 trillion yuan, up 10.6% year on year, or an average two-year growth of 5.7%. And that of the tertiary industry amounted to 45.08 trillion yuan, up 9.5% year on year, or an average two-year growth of 4.9%. The GDP for the third quarter increased by 0.2% quarter on quarter.

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First, agricultural production showed good growth momentum, and the production of animal husbandry grew fast.

In the first three quarters, the value added of agriculture (crop farming) increased by 3.4% year on year, with an average two-year growth of 3.6%. The total output of summer grain and early rice amounted to 173.84 million tons (347.7 billion jin), 3.69 million tons (7.4 billion jin) more than that of last year, up 2.2%. The sown area for autumn grain remained stable with an increase. Of the total, the sown area for corn increased considerably; major crops for autumn grain grew well and another bumper harvest is on the horizon. In the first three quarters, the output of pork, beef, mutton, and poultry reached 64.28 million tons, up 22.4% year on year. Of the total, the output of pork, mutton, beef and poultry increased by 38%, 5.3%, 3.9% and 3.8% year on year respectively. The output of milk went up by 8%, and that of eggs decreased by 2.4%. At the end of the third quarter, the number of pigs registered was 437.64 million, up 18.2% year on year, among which 44.59 million were breeding sows, up 16.7%.

Second, industrial production continued to increase, and business efficiency improved steadily.

In the first three quarters, the total value added of industrial enterprises above the designated size increased by 11.8% year on year, with an average two-year growth of 6.4%. In September, the total value added of industrial enterprises above the designated size went up by 3.1%, with an average two-year growth of 5%; an increase of 0.05% month on month. In terms of sectors, in the first three quarters, the value added of mining increased by 4.7%, that of manufacturing increased by 12.5%, and the production and supply of electricity, thermal power, gas and water increased by 12%. The value added of high-tech manufacturing increased by 20.1% year on year, with an average two-year growth rate of 12.8%. In terms of products, in the first three quarters, the production of new energy vehicles (NEVs), industrial robots and integrated circuits increased by 172.5%, 57.8% and 43.1%, with the average two-year growth of all exceeding 28%. By types of ownership, in the first three quarters, the value added of state holding enterprises increased by 9.6% year on year; that of share-holding enterprises was up by 12%; that of enterprises funded by foreign investors or investors from Hong Kong, Macao and Taiwan increased by 11.6%; and that of private enterprises increased by 13.1%. In September, the Manufacturing Purchasing Managers' Index (PMI) hit 49.6%, of which the PMI of high-tech manufacturing was 54%, a 0.3 percentage point higher than that of last month. The Production and Operation Expectation Index stood at 56.4%.

In the first eight months, the profit made by industrial enterprises above the designated size totaled 5.61 trillion yuan, up 49.5% year on year, or an average two-year growth of 19.5%. The profit rate of the business revenue of industrial enterprises above the designated size stood at 7.01%. This represents an increase of 1.2 percentage points year on year.

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Third, the service sector saw steady recovery, and modern service industry showed good growth momentum.

The tertiary industry continued to grow in the first three quarters. Specifically, in the first three quarters, the value added of information transmission, software and information technology services increased by 19.3%. That of transportation, storage and postal services increased by 15.3%, with an average two-year growth of 17.6% and 6.2% respectively. In September, the service production index increased by 5.2%, a 0.4 percentage point higher than that in August, with an average two-year growth of 5.3%, a 0.9 percentage point higher. In the first eight months, the business revenue of service enterprises above the designated size increased by 25.6% year on year, with an average two-year growth of 10.7%.

In September, the Business Activity Index for Services stood at 52.4%, 7.2 percentage points higher than that in August. Specifically, the Business Activities Index for industries hit hard by the epidemic and floods in August, such as railway transportation, air transportation, accommodation, catering, ecological protection and environment treatment, rebounded significantly to the level above the threshold. From the perspective of market expectations, the Business Activity Expectation Index for services was 58.9%, 1.6 percentage points higher than that in August. Of the total, the Business Activity Expectation Index for sectors like railway transportation, air transportation and express mail service exceeds 65%.

Fourth, market sales continued to grow, with sales of upgraded consumer goods and basic living goods increasing fast.

In the first three quarters, the total retail sales of consumer goods reached 31,805.7 billion yuan, up by 16.4% year on year, with an average two-year growth of 3.9%. In September, the total retail sales of consumer goods reached 3,683.3 billion yuan, up by 4.4% year on year, 1.9 percentage points higher than that of August, or an average two-year growth of 3.8%, 2.3 percentage points faster than that in August, and an increase of 0.30% month on month. In terms of sales in different regions, retail sales of consumer goods in urban areas in the first three quarters reached 27,588.8 billion yuan, up by 16.5% year on year, or an average two-year growth of 3.9%. Meanwhile, sales in rural areas rose by 15.6% year on year to 4,216.9 billion yuan, with an average two-year growth of 3.8%. Grouped by consumption patterns, retail sales of goods in the first three quarters was 28,530.7 billion yuan, up by 15.0% year on year, or an average two-year growth of 4.5%, and the revenue from catering was 3,275 billion yuan, up by 29.8% year on year, or an average two-year decline of 0.6%. Grouped by categories, retail sales among enterprises above the designated size of upgraded consumer goods like gold, silver, and jewelry, sports and recreational goods, and office supplies in the first three quarters grew 41.6%, 28.6%, and 21.7% year on year, respectively; and basic living goods like beverages, clothes, shoes, hats, and textiles, and daily necessities went up by 23.4%, 20.6%, and 16.0% year on year, respectively. In the first three quarters, online retail sales reached 9,187.1 billion yuan, up by 18.5% year on year. Specifically, online retail sales of physical goods totaled 7,504.2 billion yuan, up by 15.2% year on year, accounting for 23.6% of the total retail sales of consumer goods.

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Fifth, investment in fixed assets scaled up, and investment in high-tech industries and the social sector grew fast.

In the first three quarters, the investment in fixed assets (excluding rural households) reached 39,782.7 billion yuan, up by 7.3 % year on year, an average two-year growth of 3.8%, or a month-on-month growth of 0.17% in September. Specifically, investment in infrastructure in the first three quarters went up by 1.5% year on year, an average two-year growth of 0.4%; manufacturing increased by 14.8% year on year, an average two-year growth of 3.3%; and real estate development increased by 8.8% year on year, an average two-year growth of 7.2%. The floor space of commercial buildings sold reached 1,303.32 million square meters, up by 11.3% year on year, an average two-year growth of 4.6%. The total sales of commercial buildings reached 13,479.5 billion yuan, up by 16.6% year on year, an average two-year growth of 10.0%. By industry, the investment in the primary industry in the first three quarters went up by 14.0% year on year; the secondary industry increased by 12.2% year on year; and the tertiary industry grew by 5.0% year on year. Private investment went up by 9.8% year on year, an average two-year growth of 3.7%. Investment in high-tech industries grew by 18.7% year on year, an average two-year growth of 13.8%. Specifically, investment in high-tech manufacturing and high-tech services grew by 25.4% and 6.6% year on year, respectively. In terms of high-tech manufacturing, investment in the manufacturing of computers and office devices and in the manufacturing of aerospace vehicles and equipment grew by 40.8% and 38.5% year on year, respectively. In terms of high-tech services, investment in e-commerce services and in testing services went up by 43.8% and 23.7% year on year, respectively. Investment in social sectors went up by 11.8% year on year, with an average two-year growth of 10.5%. Specifically, investment in health and education went up by 31.4% and 10.4% year on year, respectively.

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

In the first three quarters, the total volume of imports and exports of goods was 28,326.4 billion yuan, up by 22.7% year on year. Specifically, the volume of exports was 15,547.7 billion yuan, up by 22.7%, and that of imports was 12,778.7 billion yuan, up by 22.6%. The trade balance was 2,769.1 billion yuan in surplus. In September, the total volume of imports and exports of goods was 3,532.9 billion yuan, a year-on-year increase of 15.4%. Specifically, the volume of exports was 1,983.0 billion yuan, up by 19.9%, and that of imports was 1,549.8 billion yuan, up by 10.1%. In the first three quarters, exports of mechanical and electrical products grew by 23% year on year, 0.3 percentage point higher than the overall export growth rate, accounting for 58.8% of the total exports. The imports and exports of general trade accounted for 61.8% of the total volume of imports and exports, 1.4 percentage points higher than the same period last year. The imports and exports by private enterprises grew by 28.5% year on year, accounting for 48.2% of the total volume of imports and exports.

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Seventh, consumer prices increased mildly, and producer price index expanded more quickly.

In the first three quarters, the consumer price index (CPI) went up by 0.6% year on year, 0.1 percentage point higher than in the first half of this year. Specifically, the CPI in September went up by 0.7% year on year, 0.1 percentage point lower than that in August, and even month on month. In the first three quarters, the CPI rose by 0.7% in urban areas and 0.4% in rural areas. Grouped by categories, in the first three quarters, prices of food, tobacco, and alcohol fell by 0.5% year on year; clothing increased by 0.2%; housing increased by 0.6%; articles of daily use and services increased by 0.2%; transportation and communication increased by 3.3%; education, culture, and recreation increased by 1.6%; medical services and health care increased by 0.3%; and other articles and services fell by 1.6%. Among food, tobacco, and alcohol, the price of pork fell by 28.0%, grain increased by 1.0%, fresh vegetables increased by 1.3%, and fresh fruits increased by 2.7%. In the first three quarters, core CPI, excluding prices of food and energy, went up by 0.7%, an increase of 0.3 percentage point compared with that of the first half of this year.

In the first three quarters, the producer price index (PPI) went up by 6.7%, an increase of 1.6 percent compared with that of the first half of this year. Specifically, the PPI in September went up by 10.7% year on year, or 1.2% month on month. In the first three quarters, the purchasing price index for industrial producers went up by 9.3% year on year, an increase of 2.2 percentage points from the first half of this year. Specifically, the purchasing price index in September went up by 14.3%, or up by 1.1% month on month.

Eighth, employment was basically stable, and the urban surveyed unemployment rate steadily fell.

In the first three quarters, urban areas created 10.45 million new jobs , achieving 95% of this year's target. In September, the urban surveyed unemployment rate was 4.9%, 0.2 percentage point lower than that in August, or 0.5 percentage point lower than that in the same period last year. The surveyed unemployment rate of the population with local household registration was 5%, and that among populations with non-local household registration was 4.8%. The surveyed unemployment rates among populations aged 16 to 24 and 25 to 59 were 14.6% and 4.2%, respectively. The urban surveyed unemployment rate in 31 major cities was 5%, 0.3 percentage point lower than that in August. Enterprise employees worked 47.8 hours per week on average, up by 0.3 hours compared with that in August. At the end of the third quarter, migrant workers from rural areas totaled 183.03 million, up by 0.7 million compared with that at the end of the second quarter.

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Ninth, per capita disposable income generally increased in step with GDP growth, and the urban-rural disposable income ratio narrowed.

The per capita disposable income stood at 26,265 yuan ($4,085) in the first three quarters, up 10.4% from the same period last year in nominal terms, with an average two-year growth of 7.1%. After deducting price factors, per capita disposable income rose 9.7% year-on-year, with an average two-year growth of 5.1%, which is basically in step with GDP growth. Separately, urban per capita disposable income came in at 35,946 yuan, up 9.5% in nominal terms, and 8.7% in real terms, while income in rural areas stood at 13,726 yuan, up 11.6% in nominal terms, and 11.2% in real terms. By income source, the per capita income from wages and salary, net business income, net property income and net transfer income saw year-on-year growth of 10.6%, 12.4%, 11.4% and 7.9% in nominal terms, respectively. The urban-rural disposable income ratio was 2.62, down 0.05 percentage point compared with the same period last year. The per capita disposable income of residents stood at 22,157 yuan, up 8% year-on-year in nominal terms.

Overall, the Chinese economy has maintained its recovery momentum in the first three quarters with progress in structural adjustments and high-quality development. However, there are rising uncertainties in the international environment and uneven recovery in the domestic economy. Next, we will follow the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, implement the decisions made by the CPC Central Committee and the State Council, uphold the underlying principle of pursuing progress while ensuring stability, fully, accurately and comprehensively implement the new development philosophy, accelerate the building of a new development paradigm, work with regular epidemic control measures in place, strengthen cross-cycle policy adjustment, make great efforts to promote sustained and sound economic development, deepen reform, opening-up and innovation, unleash market vitality, generate greater momentum for development, unleash the potential of domestic demand to keep the economy running within a reasonable range and ensure the year's main targets for economic and social development are accomplished. Thank you.

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Shou Xiaoli:

Thank you, Mr. Fu. Now the floor is open to questions, please identify your media outlet before raising questions.

CCTV:

According to the statistics just released, the economic growth of the third quarter is slower than the second quarter. What are the main reasons for the decrease? How do you comment on the third quarter's overall economic performance? Thank you.

Fu Linghui:

Thank you for your questions. Your questions are very important. During the first half of the year, the Chinese economy maintained a stable recovery. In the third quarter, there have been rising risks and challenges at home and abroad. The pandemic is spreading around the world, the momentum of global recovery slowed, commodity prices in the international market remained high, some regions in China, hit by the pandemic and floods, felt the pressure of economic transformation and adjustments. Facing the complicated situation, under the strong leadership of the CPC Central Committee, local authorities and government departments coordinated efforts between epidemic prevention and control and economic and social development, and effectively implemented macro policies to keep the recovery's momentum. Major macro indicators stayed within a reasonable range, the job market remained generally stable, people's lives continued to improve, steady progress was achieved in structure adjustments, and the quality and returns of growth continued to improve, which has laid a good foundation for achieving the year's economic and social development targets. I will elaborate on this in the following respects:

First, major macro indicators stayed within a reasonable range, and the recovery momentum continued. The economy continues to grow. Due to the high baseline of the same period last year and the impact of COVID-19 and floods, the economic growth of the first three quarters slowed compared with the same period last year. However, the growth rate continued to rise compared with previous quarters and the two-year average growth rate remained fast. The country's gross domestic product expanded 9.8% year on year in the first three quarters, higher than the target of 6%. In the third quarter, the country's GDP grew 4.9% year-on-year, the quarter-on-quarter GDP for the third quarter increased by 0.2%, with an average two-year growth of 4.9%. The job market remained generally stable. The economy continued to recover, the employment-first policy produced effects, the employment scale expanded, and the employment of key groups such as college graduates, veterans, rural migrant workers and urban people facing difficulties was guaranteed. During the first nine months of this year, the country created 10.45 million new jobs in its urban areas, achieving 95% of the annual target. China's surveyed urban unemployment rate stood at 5.2%, lower than the year's target of 5.5%. By the end of the third quarter, the number of rural migrant workers totaled 183.03 million, up 2% year on year, almost returning to pre-pandemic levels. The consumer price went up mildly. Agricultural production showed good momentum, hog production rebounded, the industrial service sector continued to grow, there was a large supply of basic living amenities, and the consumer price remained stable. In the first three quarters, the consumer price went up by 0.6% year on year, lower than the target of 3%. The international payments continued to improve. In terms of trade in goods, the trade surplus in the first three quarters expanded 23.7% year on year. In terms of trade in services, China's imports of tourism services decreased, and exports of modern services increased. The deficit of trade in services from January to August narrowed 66.7% year on year. Foreign exchange reserves were $3.2 trillion at the end of September, staying above $3 trillion for five consecutive months.

Second, the economic structure was adjusted and improved, while the quality and efficiency of development were enhanced. First of all, the industrial structure continued to be optimized. The proportion of the manufacturing industry has increased, and the high-tech manufacturing industry has grown rapidly. In the first three quarters, the proportion of manufacturing value added was 27.4%, up by 1.1 percentage points over the same period last year. The value added of high-tech manufacturing enterprises above designated size increased by 20.1% year on year, faster than all industrial enterprises above designated size. The contribution rate of the service industry has increased. In the first three quarters, the contribution rate of the service industry growth to economic growth was 54.2%, up by 1.2 percentage points over the first half of the year. Second, the demand structure continues to improve. The contribution rate of final consumption has increased. In the first three quarters, the final consumption contribution rate was 64.8%, up by 3.1 percentage points over the first half of the year. Upgraded consumption and investment in high-tech industries grew rapidly. In the first three quarters, the retail sales of sports and entertainment products and cultural and office goods both increased by more than 20% year on year, and investment in high-tech industries increased by 18.7% year on year. Third, green development continued to improve. Energy consumption per unit of GDP continued to decline. In the first three quarters, energy consumption per unit of GDP fell by 2.3% year on year, up 0.3 percentage point over the first half of the year. The overall environmental quality has improved, and the people enjoy a greener environment. From January to August, the average PM2.5 concentration of 339 cities at and above the prefectural level across the country fell by 6.5% year on year. Fourth, corporate profits have grown rapidly. From January to August, the profits of industrial enterprises above designated size have increased by 49.5% year on year, and the profits of service enterprises above designated size have increased by 35.7%.

Third, the reform and opening-up continued to be promoted, and new drivers of growth continued to increase. First, the results of supply-side structural reform continued to be consolidated. In the third quarter, the utilization rate of industrial capacity was 77.1%, which was a relatively good level compared with the same period in recent years. The asset-liability ratio of enterprises fell. At the end of August, the asset-liability ratio of industrial enterprises above designated size was 56.4%, a year-on-year decrease of 0.4 percentage point. Enterprise revenue costs fell. From January to August, the cost per 100 yuan of operation revenue of industrial enterprises above designated size was reduced 0.65 yuan compared with the same period last year. The effect of shoring up weaknesses was obvious. In the first three quarters, investment in education and health increased by 10.4% and 31.4% year on year, respectively, faster than the growth of total investment. Second, opening-up was further expanded. China's import and export trade continued to maintain rapid growth. In the first three quarters, the total value of imports and exports of goods increased by 22.7% year on year. Utilization of foreign capital continued to increase. From January to August, China's foreign investment in actual use increased by 22.3% year on year. The joint construction of the Belt and Road has been steadily promoted. In the first three quarters, China's total imports and exports to countries along the Belt and Road increased by 23.4% year on year; and the total number of China-Europe freight trains exceeded 10,000, up by 29% year on year. Third, new energy has grown rapidly. Investment in innovation continued to increase, and green, low-carbon smart products continued to emerge. In the first three quarters, the output of new energy vehicles and industrial robots increased by 172.5% and 57.8% year on year, respectively. Information technology has been widely applied, and new business forms and models such as livestreaming commerce and the platform economy have rapidly emerged. In the first three quarters, the online retail sales of physical commodities increased by 15.2% year on year, accounting for 23.6% of total retail sales of consumer goods.

Fourth, the incomes of residents continued to grow, and people's livelihoods have been effectively ensured. First, the incomes of residents continued to increase. The economy continued to recover, enterprise revenue improved, and employment has been generally stable, which have helped increase residents' incomes. In the first three quarters, the national per capita disposable income nominally increased by 10.4% year on year, and the actual growth rate was 9.7% after deducting price factors, which was basically in line with economic growth. In terms of urban and rural areas, the income of rural residents grew faster than that of urban residents. In the first three quarters, the nominal growth rate of rural residents' income was 2.1 percentage points faster than urban residents. Second, the prices of commodities related to residents' lives have stabilized and declined. Agricultural production was generally good, hog production continued to recover, food and other related commodities were in sufficient supply, and residents' lives were better guaranteed. In the first three quarters, food prices fell by 1.6% year on year, of which pork prices fell by 28% and grain prices rose by 1%. Third, guarantees of people's livelihood continued to be strengthened. Government public services continued to improve, and residents' welfare and transfer income increased. From January to August, among the general public budget expenditures across the country, expenditures on education and housing increased rapidly. In the first three quarters, the national per capita transfer income increased by 7.9% year on year, and the two-year average growth rate was 8.4%.

All these show that the fundamentals of China's long-term economic growth continue to be present, and the characteristics of strong development resilience, great potential, and broad wiggle room are obvious. However, we must notice that the international environment is unstable with many uncertainties, the domestic economic recovery is still unstable and uneven, and the challenge of maintaining the economy's stable operation has increased. In the next stage, in accordance with the decisions and arrangements of the CPC Central Committee and the State Council, we must fully, accurately and comprehensively implement the new development philosophy, build a new development pattern, implement the macroeconomic policy cross-cyclical adjustments, promote stable economic recovery and maintain economic operations within a reasonable range. Thank you.

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South China Morning Post:

Measures of power rationing and production suspension are currently being enforced in many places. Some companies and industry associations said that they have also been affected. Therefore, many institutions have subsequently lowered expectations of China's economic growth this year. My question is that what's the NBS's opinion on this situation? How to evaluate the impact of those specific measures on economic growth? Thank you.

Fu Linghui:

Thank you for your questions. Since the beginning of this year, international energy prices have risen sharply and prices of coal, natural gas, and crude oil have repeatedly hit new highs, making domestic power and coal supplies tight. Various factors led to recent power rationing in some places, which has affected normal production to a certain extent. Therefore, the CPC Central Committee and the State Council have defined a comprehensive plan and set clear requirements for energy production and supply. Relevant departments have implemented the decisions and released a series of measures to reform and ensure supply and price stability. After these measures came into effect and are producing positive results, the tight coal and power supply situation will be eased, and will have less constraints on China's economic performance. Judging from the situation in September, the growth rate of power production has accelerated. In general, the tight energy supply is temporary, and its impact on the economy is controllable. Thank you.

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Cover News:

We noticed that employment maintained stable this year and the unemployment rate indicators have improved. What's the reason for this situation? How will the country's employment develop amid the increasing pressure for economic growth? Thank you.

Fu Linghui:

Thank you for your very important question. Employment is the foundation of people's well-being and development. The government attaches great importance to employment and continues to stabilize and expand it. With economic recovery this year, the employment-first policy worked effectively, and the growth in new jobs in urban areas is expanding. Meanwhile, the urban surveyed unemployment rate was stable with moderate decline, and the overall employment maintained stable. In the first three quarters of this year, newly employed people in urban areas totaled 10.45 million, achieving 95% of the annual target. The average surveyed urban unemployment rate is 5.2%, slightly lower than the 5.5% annual control target. In September, the urban surveyed unemployment rate was 4.9%, 0.2 percentage point lower than in August.

In the first three quarters of this year, the employment situation presented the following features. First, the overall employment situation has improved. The urban surveyed unemployment rate came in at 5.1%, 5.1% and 4.9% in July, August and September, respectively. The urban surveyed unemployment rate was stable with a moderate decline. The urban surveyed unemployment rate in 31 major cities was 5.2%, 5.3%, and 5% in July, August and September, respectively, showing steady improvement. Second, employment of the prime age group has been basically stable. The urban surveyed unemployment rate of the 25 to 59 age group was 4.2%, 4.3%, and 4.2% in July, August and September, respectively. The unemployment rate was lower and stable. Third, the employment of key groups has improved. Employment of college graduates increased, and youth unemployment fell. The surveyed unemployment rates of the population aged from 16 to 24 were 16.2%, 15.3% and 14.6% in July, August and September, respectively, falling month by month. We have continued to work to ensure employment for rural migrant workers, and their employment situation continued to improve. At the end of the third quarter, the total number of rural migrant workers increased 2% year on year, returning to the level in the same period of 2019 before the COVID-19 pandemic. The unemployment rate of rural migrant workers fell slightly in the third quarter.

In the first three quarters of this year, the employment situation has maintained a stable performance. The main reasons are: first, China's economy continued stable recovery, creating jobs. The gross domestic product (GDP) in the first three quarters increased 9.8% year on year, with an average two-year growth of 5.2%. The expansion of the national economy inevitably increased labor inputs and created jobs. Second, China's service industry continued its stable recovery to increase employment opportunities. The service industry has been expanding, and employment capacities have further grown. In September, the growth of the service industry accelerated, which was conducive to the improvement of employment. In September, the Index of Services Production grew by 5.2% year on year, 0.4 percentage point higher than that in August. The index of employment of the service industry's Purchasing Managers' Index (PMI) is 0.5 percentage point higher than that of August. Third, the employment-first policy has continued to produce positive results. The employment of key groups, including college graduates and rural migrant workers, improved, keeping the urban surveyed unemployment rate stable with moderate decline. Youth unemployment fell in the third quarter of this year. We have strengthened measures to create more jobs through business startups and strengthen vocational training to improve employment. Fourth, the platform economy and flexible employment have provided more employment opportunities. New business models are developing fast and will increase the need for new jobs. Since this year, the rapid development of livestream marketing and online shopping has also driven the increase of employees in relevant industries.

However, it should also be noted that the total pressure on employment and structural contradictions still exist, the unemployment rate of some groups remains high, and there are still job shortages in some coastal areas, so we need to continue our efforts to maintain stable employment. We need to continue to make cross-cycle adjustments to macro policies, promote steady economic recovery, and create favorable conditions for employment. We will implement the employment-first policy, strengthen employment services for key groups of college students and migrant workers, increase vocational skills training, promote the effective connection between supply and demand in the labor market, and promote stable and positive employment. Thank you.

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CNBC:

Some recent data on real estate investment showed a decline in August and September. What impact has the recent real estate situation had on economic growth? How has it affected consumption? Thank you.

Fu Linghui:

Thank you for your questions. People also pay close attention to issues in real estate. The real estate industry is not only an important part of the national economy, but is also closely related to the lives of residents. In recent years, in accordance with the requirements of the central government, all regions and departments have adhered to the principle of "no speculation in housing," continued to stabilize land prices, house prices and expectations, effectively prevented and resolved potential risks, and promoted the steady and healthy development of the real estate market.

Since this year, by improving the long-term mechanism of the real estate market, curbing unreasonable demand, promoting the stable release of rigid demand, and restricting some real estate enterprises from blindly expanding by borrowing, the real estate market has generally stabilized, and real estate investment, sales and house prices have gradually stabilized. In the first three quarters of this year, the sales area of commercial housing increased by 11.3% year on year, with a two-year average growth rate 4.6%, down 1.3 percentage points than that for January to August. Investment in real estate development rose 8.8% year on year, with a two-year average growth of 7.2%, 0.5 percentage point lower than in the January-August period. In July and August, the growth rates of housing prices in 70 big and medium-sized enterprises were generally declining.

In the next stage, the real estate market is expected to maintain steady development with the continuous improvement of the housing system for both purchases and rentals and as market entities become more rational.

As for the impact of real estate on economic growth, in the first three quarters of this year, the two-year average growth rate of the added value of real estate was 4.8%, which was 1.3 percentage points lower than that of the first half of this year. On the whole, the impact has been limited. Thank you.

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Bloomberg News:

I have two questions. The first one is: Can you give us some breakdown for the contribution from the exports, capital formation and consumption. The second one is: You said that the policies would have an effect on coal output. Are you seeing an increasing coal output in October from September, because coal output fell while electricity demand rose in September, so that situation doesn't reverse. The power shortage is going to get worse in October. So has it already set to improve or is that going to happen in the future?

Fu Linghui:

Thank you for your questions. I can give you some data on the contribution of the three major demands to growth. In the first three quarters, the contribution rate of final consumption expenditure to economic growth was 64.8%, the contribution rate of total capital formation was 15.6%, and the contribution rate of net exports of goods and services was 19.5%.

As for coal production, it should be noted that the coal market supply was tight due to affected release of some production capacity. The central government attaches great importance to this. Recently, relevant departments have issued a series of measures to stabilize and increase coal supply and production. It is believed that the tight situation will be gradually improved. Thank you.

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CNR:

We know that the prices of other goods will only be stable when grain prices are stable, but recently, Shanxi province suffered serious floods. Will this have an impact on national grain production this fall? What do you think of the agricultural production situation since this year? Thank you.

Fu Linghui:

Thank you for your questions. Agriculture is indeed of great concern and is the fundamental industry of the national economy. The central government attaches great importance to agricultural development. Since this year, various parties have taken measures to support stable and increased agricultural production and maintain the safety of grain production. In the first three quarters, the overall situation of China's agricultural economy was relatively good.

First, the scale of agricultural production continued to expand. Thanks to various policies and measures to support agricultural development, the added value of China's agriculture, forestry, animal husbandry and fishery grew by 7.4% year on year in the first three quarters, with a two-year average growth of 4.9%, which was 0.6 percentage points faster than in the first half of the year. In the third quarter, the two-year average growth rate of the added value of agriculture, forestry, animal husbandry and fishery was 5.5%, contributing more than 10% to China's economic growth.

Second, grain production shows good momentum. Although severe natural disasters took their toll on crops in some regions, weather conditions were generally favorable for agricultural production across the country, and field management and disaster alleviation measures were also effective. This year, both summer grain crops and early season rice have seen increases in output, registering a 2.2% rise in total. With increasing support for grain production, farmers gain more benefits and are more active in growing grains than before. The sown area for fall grain has been significantly enlarged, with more high-yielding corn being planted. Generally, crops sown in the fall are expected to produce high yields, contributing to another bumper harvest year.

Third, animal husbandry production has maintained fast growth. Strong measures were taken to resume hog production and to promote the development of the animal husbandry industry, which have yielded obvious results. In the first three quarters, the output of pork, beef, mutton and poultry rose 22.4% year on year. More specifically, pork output increased 38%, with 491.93 million hogs slaughtered, up 35.9% year on year; and 437.64 million pigs registered in stock, an increase of 18.2% year on year. Both numbers have largely returned to normal levels.

Stable agricultural production is conducive to a sound national economy and the improvement of people's well-being, laying a solid foundation for the steady and sound socioeconomic development for the whole year. However, we need to note that there remain weak points in China's agricultural production, and we should continue our efforts to promote the steady and sustained development of agriculture. Thank you.

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Reuters:

What is your economic outlook for the fourth quarter or next year? Also, has China made sufficient policies in preparation for a further economic downturn, and how should China react to the spillover effect brought by the U.S. Federal Reserve's policy changes? Thank you.

Fu Linghui:

Thank you for your questions. The economic trends in the next phase have drawn much attention. Since the beginning of this year, China has made considerable progress in its economic recovery. Although the country's economic growth slowed down in the third quarter due to many factors such as the pandemic, floods and a higher base number, it still showed strong resilience and vitality. In general, China's economy will sustain the momentum of continued recovery and move toward high-quality development, and the country has the ability to achieve its projected targets and tasks for socioeconomic development for the whole year.

First, economic recovery is well supported. In terms of consumption, stable employment and a continued rise in residents' incomes are conducive to higher spending power. The stable domestic epidemic prevention and control situation, a better consumption environment, and improving social security will also help to raise consumers' willingness to make purchases. In the first three quarters, Chinese per capita nominal consumer spending rose 15.8% year on year, with a two-year average growth of 5.7%, both higher than those of the first half of 2021. In terms of investment, business profits maintained relatively fast growth, the current rate of capacity utilization remains at a higher level, and supportive policies in the real economy will continue to take effect. All will help to improve investment in manufacturing. In the first three quarters, manufacturing investment registered a two-year average growth of 3.3%, showing a general trend of improvement. There have also emerged more favorable factors for the growth of infrastructure investment. This year marks the beginning of the 14th Five-Year Plan (2021-2025). With major projects starting construction one after another and special government bonds issued at a faster pace, there will be more infrastructure investment. In the first three quarters, the two-year average growth rate of infrastructure investment was 0.4%, up 0.2 percentage point compared with the period January to August. In terms of imports and exports, against the background of the global economic recovery, China boasts a complete industrial system and strong supporting capacity, which enables enterprises to meet the demands of the changing global market. China's exports are hence expected to maintain faster growth. At the same time, the domestic economic rebound can also drive China's imports. In the first three quarters, China's imports and exports expanded 22.7% year on year.

Second, progress has been achieved and stability ensured in industrial development. Despite the combined impact of the pandemic, floods and other adverse factors, the trend toward promoting quality and upgrading has remained unchanged. The overall situation of grain production is stable with increased output of summer grain crops and early season rice. Owing to the expanded sown area and general favorable climate conditions, the fall bumper harvest is in sight. The pace of industrial digitalization has also been stepped up. In the first three quarters, among industries above designated size, the added value of high-tech manufacturing industry increased by 20.1% year on year. The output of integrated circuits and industrial robots has grown substantially. The modern service industries also maintained sound growth momentum. In the first three quarters, the added value of the industries of information transmission, software and information technology increased by 19.3% year on year. With the continuous recovery of the Chinese economy and the steady pursuit of high-quality development, China's industries will keep heading in a positive direction.

Third, innovation-driven power has been greatly strengthened. With the deepening reform to delegate power, streamline administration, optimize government services and the steady development of supply-side reform, China's innovation development has maintained sound growth and injected powerful vitality into economic development. According to a report released by the World Intellectual Property Organization (WIPO), China ranked 12th in the latest Global Innovation Index 2021, two places higher than last year. We have kept increasing the innovation input. In 2020, China's spending on research and development increased by 10.2% year on year, accounting for 2.4% of total GDP, close to the average level of countries in the Organization for Economic Co-operation and Development (OECD). With the optimized innovation environment and the improved supporting policies, we will further increase expenditure on technological innovation with enterprises as the main body. Innovative products are constantly emerging. A flow of major technological achievements in the fields of manned spaceflight, deep-water exploration and quantum science and technology have been revealed to the public. The bio-pharmaceutical industries, including vaccines and innovative medicines, have also achieved rapid growth. In the first three quarters, the added value of the pharmaceutical industry increased by 29.2% year on year. The innovative vitality has been greatly unleashed. In the first three quarters, the online retail sales of physical commodities and the trade of cross-border e-commerce saw a year-on-year increase of 15.2% and 20.1%, respectively. The outputs of new energy products and smart products also grew rapidly.

Regarding the policy aspect that you mentioned, it is fair to say that the government has accumulated a wealth of experience in making adjustments and controls. Over the past few years, on the basis of range-based regulation, we have strengthened directional and targeted regulations. We are fully capable of ensuring the economy operates within a reasonable range, and promoting the sound development of the economy. At present, China's financial strength has grown noticeably. Due to the relatively large space of monetary policies, we are capable of launching forceful measures in a timely manner according to changes in the situation, in a bid to promote the steady development of the economy, such as with the feasible monetary policy adjustments for major economies. Since this year, financial management departments have made a set of policy arrangements, and reduced the potential spillover effects brought about by the policy adjustments in major developed economies. Thank you.

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Yicai:

The producer price index (PPI) soared by a record high of 10.7% in September. What are the reasons for that? How do you view the trend of PPI in the coming quarter? Thank you.

Fu Linghui:

Thank you for your questions. The price change has received widespread attention. Since this year, the faster expansion of PPI can be attributed to the the combined impact of sharp price rises of international bulk commodities, increased domestic demand due to economic recovery and the tight supply of some products. In the first three quarters, PPI increased by 6.7% year on year, up by 1.5 percentage points compared with the first half of this year (H1). From the key features, the rising prices of the means of production is one of the major factors driving the rise of PPI. In the first three quarters, the prices of the means of production rose 8.9% year on year, up by 2.1 percentage points compared with H1. The prices of the means of subsistence rose by 0.2% year on year, up by 0.1 of a percentage point compared with H1. In terms of industry, price rises in petroleum, chemicals, coal and metal have had a large impact. Due to the rising prices of international crude oil, the prices of domestic petroleum and chemical-related industries rose by 10%-30% in the first three quarters, faster than that of H1. Driven by lower supply, the prices of the coal and metal-related industries increased as well. In the first three quarters, the prices of coal-related industries and the steel and non-ferrous metal-related industries rose by more than 30% and 20%, respectively.

Looking at the most recent period, we can see that due to the continuous rise in international energy prices and the tight supply of some domestic raw materials, the PPI may continue to run at a high level. However, in the medium and long term, with gradual improvements in global energy supply and shipping conditions as well as an increase in domestic product supply, the PPI is expected to gradually stabilize. It should also be noted that faced with the expansion of PPI growth and the increase in difficulties for production and operation of enterprises, relevant departments have actively taken measures to ensure supply and stable prices, and the effects will gradually become noticeable. In some areas, in the third quarter, the price increase of the steel and non-ferrous metals industries dropped by 3.3 and 3.8 percentage points respectively from the second quarter. Thank you.

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Global Times:

The latest World Economic Outlook released by the IMF forecasts that China's GDP will grow by 8%in 2021, which is 0.1 percent lower than the previous forecast. What is your response to this? Thank you.

Fu Linghui:

Thank you for your question. It should be said that due to multiple factors such as repeated waves of the pandemic worldwide, rising commodity prices, tight international shipping, labor shortages and shortages of key parts and components, the pace of global economic recovery has slowed overall since the third quarter. At the same time, inflation levels in major economies have continued to rise. For example, in September, the CPI in the United States rose by 5.4% year-on-year, and the CPI in the Eurozone rose by 3.4%, both of which were relatively high in recent years. This has also increased the possibility of policy shifts in these economies and has restricted the recovery of the global economy to a certain extent. Under these conditions, the IMF recently estimated that the global economic growth rate in 2021 will be lowered to 5.9% from what was previously expected to be 6%. Among them, the economic growth rate of developed countries has been lowered to 5.2% from the original forecast of 5.6%, reflecting concerns about changes in the global economy.

Against this backdrop, since China is a country deeply embedded in the globalization process, I think it is normal for the IMF to make some expected adjustments. However, it should be pointed out that China is the only country among the major global economies that achieved positive growth despite the impact of the pandemic in 2020. Compared with other countries, the base number is relatively high. Major international organizations expect that China's economy will still maintain a relatively high growth rate at about 8% in 2021. This rate is not only higher than the global average growth rate, but also higher than the growth rate of major economies, reflecting the international community's optimism regarding the outlook for China's economic growth, and also indicates that China's economy is resilient and has huge potential. Thank you.

Shou Xiaoli:

Last two questions.

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Red Star News:

In recent months, China's manufacturing PMI has continued to decline. In September, the PMI was 49.6%, which was 0.5 percentage points lower than the previous month and below the threshold. What caused this? Is it related to industrial raw material prices and recent energy shortages? Will it have an adverse impact on the national economy? What are the expectations for the future? Thank you.

Fu Linghui:

Thank you for your questions. It should be said that the recent decline in manufacturing PMI is the result of multiple factors at home and abroad. From the international perspective, the recovery of the world economy is slowing down, the prices of international commodities have risen sharply, and the tension in international shipping will inevitably affect the expectations of domestic companies. From the domestic perspective, due to the impact of the pandemic resurgence and floods in some regions in July and August, some long-term accumulated structural problems have appeared, which will also affect business expectations.

Although the manufacturing PMI declined in September, the overall outlook for the development prospects of enterprises remained stable. We can see that in the manufacturing PMI in September, the expected index of enterprise production and operation activities was 56.4%, which is still at a relatively high level. As for the future, the fundamentals of the long-term improvement of China's economy have not changed. The overall plan for pandemic prevention and control and economic and social development have been solidly promoted. The cross-cycle adjustment of macro policies has been effectively implemented. Policies supporting the development of the real economy have continued to be effective. Enterprises' expectations should stabilize. Thank you.

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The Beijing News:

The data released today also showed that pork prices fell by 28% year-on-year in the first three quarters. Recently, pork prices have been declining, and farmers have suffered losses, especially during the National Day holiday. Pig prices across the country have repeatedly hit new lows, and farmers are becoming more and more panicked. What negative impact will this have on the pork supply in the next period? What about pork price trends in the future? Thank you.

Fu Linghui:

Thank you for your questions. Since the beginning of this year, live pig production has continued to recover, production capacities have continued to expand and related prices have declined. In general, in the next stage, as the demands for meat pickling in some areas continue to increase, coupled with consumption boosts from the New Year's Day and Spring Festival holidays, the demands for pork consumption will increase. At the same time, the second round of frozen pork procurement and storage by the central government will be launched during the year, which is conducive to the stability of pork prices.

In terms of future development, the current large-scale breeding of live pig production is continuously expanding. These large-scale enterprises are improving their ability to grasp market changes and prevent and respond to market fluctuation risks. At the same time, we see that for the live pig market, the national regulatory and control mechanism is constantly improving, which is conducive to the stability of live pig production. Thank you.

Shou Xiaoli:

Thank you, Mr. Fu Linghui, and thank you media friends. This is the end of today's press conference.

Translated and edited by Wang Qian, Zhu Bochen, Duan Yaying, He Shan, Yang Xi, Li Huiru, Gao Zhan, Chen Xia, Wang Mengru, Huang Shan, Xiang Bin, Yuan Fang, Qin Qi, Zhang Rui, Ma Yujia, Wang Wei, Zhang Tingting, David Ball, Jay Birbeck, and Tom Arnstein. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.