SCIO briefing on China's economic performance in the first half of 2022

Speaker:

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

Chairperson:

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

Date:

July 15, 2022

Shou Xiaoli:

Ladies and gentlemen, good morning. Welcome to this press conference held by the SCIO. Today, we will continue the regular release of economic data. We have invited Mr. Fu Linghui, spokesperson of the NBS and director general of the Department of Comprehensive Statistics of the NBS, who will introduce China's economic performance in the first half of 2022 and answer your questions.

Now, I would like to give the floor to Mr. Fu for his introduction.

Fu Linghui:

Friends from the media, good morning. As per usual practice, I will first brief you on the main economic indicators and the performance of the national economy in the first half of 2022, and then answer your questions.

Strong measures have been adopted to counter the impact of unexpected factors, and the national economy has registered a stable recovery.

Since the beginning of this year, the increasingly complicated and challenging international environment, as well as multiple, sporadic domestic outbreaks of COVID-19, have led to extremely unusual economic development with a significant increase in adverse impacts. The economy in the second quarter was under noticeable downward pressure with serious impacts from unexpected factors. Faced with extreme complexities and difficulties, under the strong leadership of the Central Committee of the Communist Party of China (CPC) with Comrade Xi Jinping at its core, all regions and departments thoroughly implemented the decisions and arrangements made by the CPC Central Committee and the State Council, effectively coordinated COVID-19 countermeasures with economic and social development, stepped up macro policy adjustments, and effectively implemented a package of policies and measures to boost stability. As a result, the resurgence of the pandemic was contained, the national economy registered a stable recovery, production and demand saw improving margins, market prices were generally stable, people's livelihoods were sufficiently protected with robust steps, the momentum of high-quality development was sustained and overall social stability was maintained.

1. The national economy realized positive growth in the second quarter despite downward pressure.

Major economic indicators plunged in April. Faced with new growing downward pressure, the CPC Central Committee and the State Council made sound decisions and took timely measures, implemented the policy measures of the Central Economic Work Conference and the Government Work Report early on, instead of deploying indiscriminate stimulus spending, rolled out a package of pro-stability policy measures according to the general guidelines and policy direction, and held a national teleconference to make arrangements on maintaining stable macroeconomic performance. The policies soon took effect. The decline of major economic indicators narrowed in May. The economy registered a stable recovery in June and achieved positive growth in the second quarter. According to preliminary estimates, China's gross domestic product (GDP) in the first half of the year was 56.26 trillion yuan, up by 2.5% year on year at constant prices. By industry, the value added of the primary industry was 2.91 trillion yuan, up by 5% year on year; the secondary industry 22.86 trillion yuan, up by 3.2%; and the tertiary industry 30.49 trillion yuan, up by 1.8%. Specifically, GDP for the second quarter was 29.25 trillion yuan, up by 0.4% year on year. By industry, in the second quarter, the value added of the primary industry was 1.82 trillion yuan, up by 4.4% year on year; the secondary industry 12.25 trillion yuan, up by 0.9%; and the tertiary industry 15.18 trillion yuan, down by 0.4%.

2. Summer grain witnessed a bumper harvest and animal husbandry grew steadily.

In the first half of this year, the value added of agriculture (crop farming) grew by 4.5% year on year. The overall output of summer grain was 147.39 million metric tons, 1.43 metric million metric tons higher than that of last year, an increase of 1%. The structure of crop farming continued to be optimized, as the sown area for cash crops like rapeseed increased. In the first half of this year, the output of pork, beef, mutton and poultry was 45.19 million metric tons, up by 5.3% year on year. Specifically, the outputs of pork, beef and mutton rose by 8.2%, 3.8% and 0.7%, respectively, and poultry was down by 0.8%; that of milk rose by 8.4% and eggs increased by 3.5%. In the second quarter, the output of pork, beef, mutton and poultry increased by 1.6% year on year, of which pork was up by 2.4%. By the end of the second quarter, the number of pigs registered in stock was 430.57 million, down by 1.9% year on year, among which 42.77 million were breeding sows; and 365.87 million pigs were slaughtered, up by 8.4%.

3. Industrial production steadily recovered and high-tech manufacturing enjoyed fast development.

In the first half of this year, the total value added of industrial enterprises above designated size grew by 3.4% year on year. In terms of sectors, the value added of mining increased by 9.5% year on year; that of manufacturing increased by 2.8%; and the production and supply of electricity, thermal power, gas and water increased by 3.9%. The value added of high-tech manufacturing went up by 9.6% year on year, 6.2 percentage points higher than that of industrial enterprises above designated size. In terms of ownership, the value added of state holding enterprises grew by 2.7% year on year, that of share-holding enterprises grew by 4.8%, that of enterprises funded by foreign investors and investors from Hong Kong, Macao and Taiwan fell by 2.1%, and that of private enterprises grew by 4%. In terms of products, the production of new-energy automobiles, solar cells and mobile communication base stations grew by 111.2%, 31.8% and 19.8% year on year, respectively.

In the second quarter, the total value added of industrial enterprises above designated size was up by 0.7% year on year. Specifically, that in April went down by 2.9% year on year; that in May shifted from negative to positive and was up by 0.7%; and that in June increased by 3.9%, 3.2 percentage points higher than that of the previous month, or up by 0.84% month on month. In June, the Manufacturing Purchasing Managers' Index stood at 50.2%, 0.6 percentage point higher than that of the previous month; and the Production and Operation Expectation Index was 55.2%, 1.3 percentage points higher than that of the previous month. In the first five months, the total profits made by industrial enterprises above designated size was 3.44 trillion yuan, up by 1% year on year.

4. The service sector gradually recovered and modern service industries witnessed good growth momentum.

In the first half of this year, the value added of services went up by 1.8% year on year. Of this total, that of information transmission, software and information technology services and that of financial intermediation grew by 9.2% and 5.5%, respectively. In the second quarter, the value added of services was down by 0.4% year on year. The Index of Services Production in April was down by 6.1% year on year; the decline in May narrowed to 5.1% and that in June shifted from decline to an increase of 1.3%. In the first five months, business revenue of service enterprises above designated size grew by 4.6% year on year, 0.4 percentage point higher than that of the first four months. In June, the Business Activity Index for services was 54.3%, 7.2 percentage points higher than that of the previous month. Specifically, the Business Activity Index for retail sales, railway transportation, road transportation, air transportation, postal services, monetary and financial services and capital market services stayed within the expansion rage of 55% and above. In terms of market expectation, the Business Activity Expectation Index for services was 61%, 5.8 percentage points higher than that of the previous month.

5. Market sales improved and retail sales of goods for basic living grew fast.

In the first half of this year, the total retail sales of consumer goods reached 21.04 trillion yuan, down by 0.7% year on year. Analyzed by area, the retail sales in urban areas reached 18.27 trillion yuan, down by 0.8%, and the retail sales in rural areas stood at 2.77 trillion yuan, down by 0.3%. Grouped by consumption patterns, the retail sales of goods reached 19.04 trillion yuan, up by 0.1%; and the income of catering was 2 trillion yuan, down by 7.7%. The consumption of goods for basic living grew steadily. The retail sales of grain, oil and food and that of beverages by enterprises above designated size grew by 9.9% and 8.2%, respectively. Online retail sales totaled 6.3 trillion yuan, up by 3.1%. Specifically, the online retail sales of physical goods were 5.45 trillion yuan, up by 5.6%, accounting for 25.9% of the total retail sales of consumer goods. In the second quarter, the total retail sales of consumer goods went down by 4.6% year on year. Specifically, that in April was down by 11.1% year on year; the decline in May narrowed to 6.7%; and that in June shifted from decline to an increase of 3.1% year on year, or up by 0.53% month on month.

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6. Investment in fixed assets continued to grow and investment in high-tech industries and social sectors grew fast.

In the first half of this year, the investment in fixed assets (excluding rural households) reached 27.14 trillion yuan, up by 6.1% year on year. Specifically, in the first half of this year, the investment in infrastructure was up by 7.1%, manufacturing up by 10.4%, and real estate development down by 5.4%. The floor space of commercial buildings sold reached 689.23 million square meters, down by 22.2%; the total sales of commercial buildings was 6.61 trillion yuan, down by 28.9%. By industry, investment in the primary industry went up by 4%, the secondary industry up by 10.9%, and the tertiary industry up by 4%. Private investment was up by 3.5%. The investment in high-tech industries grew by 20.2%, of which the investment in high-tech manufacturing and high-tech services increased by 23.8% and 12.6%, respectively. In terms of high-tech manufacturing, the investment in the manufacturing of electronic and communications equipment and in the manufacturing of medical equipment, measuring instruments and meters grew by 28.8% and 28%, respectively. In terms of high-tech services, the investment in services for transformation of scientific and technological achievements and in research, development and design services went up by 13.6% and 12.4%, respectively. The investment in social sectors went up by 14.9%, among which, investment in health and education went up by 34.5% and 10%, respectively. In the second quarter, the investment in fixed assets (excluding rural households) witnessed a year-on-year increase of 4.2%. Specifically, the growth rate was 1.8% in April, accelerated to 4.6% in May and rebounded further to 5.6% in June. In June, investment in fixed assets (excluding rural households) went up by 0.95% month on month.

7. Imports and exports of goods grew fast and the trade structure continued to be optimized.

In the first half of this year, the total value of imports and exports of goods was 19.8 trillion yuan, an increase of 9.4% year on year. The total value of exports was 11.14 trillion yuan, up by 13.2%. The total value of imports was 8.66 trillion yuan, up by 4.8%. The trade balance was 2.48 trillion yuan in surplus. The imports and exports of general trade increased by 13.1%, accounting for 64.2% of the total value of the imports and exports, 2.1 percentage points higher than that of the same period last year. The imports and exports by private enterprises increased by 13.6%, accounting for 49.6% of the total value of imports and exports, 1.9 percentage points higher than that of the same period last year. The imports and exports of mechanical and electronic products increased by 4.2%, accounting for 49.1% of the total value of the imports and exports. In June, the total value of imports and exports was 3.77 trillion yuan, an increase of 14.3% year on year. The total value of exports was 2.21 trillion yuan, up by 22%. The total value of imports was 1.56 trillion yuan, up by 4.8%.

8. Consumer price saw mild growth and growth of producer prices for industrial products continued to decline.

The consumer price index (CPI) went up by 1.7% year on year in the first half of this year. Grouped by commodity categories, prices for food, tobacco and alcohol were up by 0.4% year on year; clothing up by 0.5%; housing up by 1.2%; articles and services for daily use up by 1%; transportation and communication up by 6.3%; education, culture and recreation up by 2.3%; medical services and health care up by 0.7%; and other articles and services up by 1.2%. In terms of food, tobacco and alcohol prices, prices for pork went down by 33.2%, grain up by 2.4%, fresh fruit up by 12% and fresh vegetables up by 8%. Core CPI excluding the prices of food and energy went up by 1%. In the second quarter, the CPI went up by 2.3% year on year. Specifically, it increased by 2.1% year on year in both April and May, rose by 2.5% year on year, and maintained the same level of growth month on month in June.

In the first half of this year, the producer prices for industrial products went up by 7.7% year on year, with year-on-year growth of 6.8% in the second quarter. Specifically, prices grew by 8% in April and 6.4% in May year on year; up by 6.1% year on year and maintained the same level of growth month on month in June. The purchasing prices for industrial producers went up by 10.4% year on year in the first half of this year, and up by 9.5% year on year in the second quarter. Specifically, prices grew by 10.8% in April and 9.1% in May year on year; up by 8.5% year on year and 0.2% month on month in June.

9. Employment trends improved and the surveyed unemployment rate in urban areas fell.

In the first half of this year, the newly increased employed people in urban areas totaled 6.54 million. The surveyed unemployment rate in urban areas averaged 5.7% in the first half of this year and 5.8% in the second quarter. In April, the surveyed unemployment rate in urban areas was 6.1%, with consecutive declines of 5.9% in May and 5.5% in June. In June, the surveyed unemployment rate of population with local household registration was 5.3% and that of population with non-local household registration was 5.8%, of which that of population with non-local agricultural household registration stood at 5.3%. Specifically, the surveyed unemployment rates of the population aged from 16-24 and from 25-59 were 19.3% and 4.5%, respectively. The urban surveyed unemployment rate across 31 major cities was 5.8%, 1.1 percentage points lower than May. Employees of enterprises worked on average 47.7 hours per week. By the end of the second quarter, the number of rural migrant workers totaled 181.24 million.

10. Residents' incomes steadily increased and the urban-rural per capita income ratio narrowed.

In the first half of this year, the nationwide per capita disposable income of residents was 18,463 yuan, a nominal increase of 4.7% year on year. Real growth was 3% after deducting price factors. In terms of permanent residence, the per capita disposable income of urban households was 25,003 yuan, a nominal growth of 3.6% and a real growth of 1.9% year on year. The per capita disposable income of rural households was 9,787 yuan, a nominal growth of 5.8% and real growth of 4.2% year on year. By sources of income, nationwide per capita salary income, net business income, net property income and net income from transfers witnessed nominal growths of 4.7%, 3.2%, 5.2% and 5.6%, respectively. The per capita income of urban households was 2.55 times that of rural households, 0.06 less than the same period last year. Median nationwide per capita disposable income was 15,560 yuan, a nominal increase of 4.5% year on year.

Generally speaking, with a series of policies to solidly stabilize the economy achieving notable results, the national economy has overcome the adverse impact of unexpected factors, demonstrating stable recovery momentum. The second quarter, in particular, witnessed positive economic growth and stable macroeconomic performance was maintained, which are hard-earned achievements. However, we should be aware that the foundation for the sustainable and steady recovery of the economy is yet to be consolidated. Externally, this is due to the rising risk of stagflation in the world economy, a trend toward the tightening of policies by major economies, and an obvious increase in instabilities and uncertainties. Meanwhile, domestically, the impact of the epidemic is lingering, shrinking demand is intertwined with disrupted supply, structural problems are combined with cyclical problems, and market entities still face difficulties operating. In the next stage, we must follow the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, apply the new development philosophy in full, in the right manner and in all fields, follow the requirements for containing the epidemic, stabilizing the economy and keeping development secure, respond to COVID-19 and pursue economic and social development in a coordinated manner, take advantage of the critical period of economic recovery, adopt strong measures to promote the implementation of a package of policy measures to maintain a stable economy, continue to ensure stability on six fronts and maintain security in six key areas, continue to enhance efficiency, stimulate vitality and add impetus, and constantly consolidate the foundation for a steady economic recovery to keep major economic indicators within the appropriate ranges.

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Shou Xiaoli:

Thank you, Mr. Fu. Now the floor is open for questions. Please identify your news outlet before asking your question.

Phoenix TV:

The Chinese economy slowed down in the second quarter due to a heavy blow from the pandemic. What are your views on this? Will the Chinese economy be able to sustain a recovery? Thank you.

Fu Linghui:

Thank you for your questions. In the second quarter, such unexpected factors as complex changes in the international environment and the resurgence of COVID-19 cases at home have put the Chinese economy under much greater downward pressure. In light of this, under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, all regions and departments have worked to coordinate pandemic control with socioeconomic development effectively. A package of policy measures was implemented to stabilize the economy with good results, and the pandemic resurgence was brought under effective control. The economy has, on the whole, stabilized and rebounded. The main characteristics are as follows:

First, the Chinese economy managed to resist pressure and achieve growth. In April, major economic indicators declined year on year due to the pandemic resurgence. In response, all sides involved intensified efforts to stabilize the economy and actively worked to ensure logistics efficiency. With all these efforts, we succeeded in resisting the downward pressure and getting the economy back on the track of stabilizing and rebounding, thus securing growth in the second quarter. The GDP expanded 0.4% year on year, the value-added of industrial enterprises above the designated size grew 0.7%, and the fixed asset investment was 4.2%.

Second, in terms of monthly performance, the economy began to rebound gradually in May. In April, due to the impact of unexpected factors, major indicators contracted markedly. Then, with a general improvement in the pandemic situation, the resumption of work and business production, and the payoff of several policy measures to stabilize the economy, the slide in April was halted in May. Then in June, major indicators stabilized and rebounded. Concerning production, in June, the value-added of industrial enterprises above the designated increased 3.9% year on year, up 3.2 percentage points from the previous month; the production index of the service industry grew 1.3%, compared with the 5.1% fall in May. Regarding demand, in June, the retail sales of consumer goods grew 3.1% after the 6.7% fall in May; export grew 22%, 6.7 percentage points higher than the previous month. In terms of regions, of all the 31 provincial regions on the Chinese mainland, 21, or 67%, saw faster growth in the value-added of industrial enterprises above the designated size; 30, or 96.8%, reported faster growth in the retail sales of consumer goods of enterprises above the designated sales volumes.

Third, employment and price levels were generally stable. The surveyed urban unemployment rate has fallen for two consecutive months. The rate averaged 5.8% nationally in the second quarter. It stood at 6.1% in April and fell to 5.9% in May and 5.5% in June. In June, the rate was 4.5% for those aged 25-59, the main age group for employment, a 0.6 percentage point lower than the previous month; the rate was 5.3% for migrant workers with permanent rural residency, down by a 0.9 percentage point from the previous month. Consumer prices grew by a mild 2.3% in the second quarter. The growth was 2.1% year on year in April and May, and a slightly higher 2.5% in June. The growth was much lower than that of the Eurozone and the United States, which stood at 8.6% and 9.1%, respectively, in June.

Fourth, foreign trade delivered good performance, and forex reserves remained stable. Foreign trade in goods maintained a fast growth of 8.1% in the second quarter. It grew 0.1% and 9.6% in April and May and expanded to 14.3% in June. China's forex reserves stood above $3 trillion throughout the second quarter.

Fifth, industries continued to upgrade. New industries saw fast growth. In the second quarter, the value-added of high-tech manufacturing enterprises above the designated size rose 5.7% year on year, 5 percentage points higher than that of all industrial enterprises above the designated size. The proportion of the manufacturing sector in the economy continued to increase, with its value-added accounting for 28.8% of the national GDP in the second quarter, a 0.3 percentage point higher year on year. The modern service sector also registered fast growth, as represented by the information transmission software and information technology service segment, whose value-added grew 7.6% year on year, and the financial service segment, whose value-added grew by 5.9% year on year, both remarkably faster than that of the entire service sector.

Generally speaking, the Chinese economy withstood multiple pressure and challenges in the second quarter. Its major indicators first declined and then stabilized and rebounded. Next, although the Chinese economy will still face many difficulties and challenges due to such unexpected factors as complex and grave international environment and the impact of the pandemic at home, the fundamentals sustaining China's long-term economic growth will remain unchanged. Strong resilience, enormous potential, and vast room for maneuver will remain salient features of the Chinese economy. As the policy measures to stabilize the economy continue to pay off, the Chinese economy is expected to gradually recover and maintain stable growth. Thank you.

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CCTV:

Since the beginning of this year, complex changes have occurred both at home and abroad. What are the characteristics of economic growth in China? What are your views on the economic operation of the first half year? Thank you.

Fu Linghui:

Thank you for your questions. Since the beginning of this year, the international environment has become increasingly complex and grave, and the Ukraine crisis has further evolved; at home, there have been frequent and sporadic COVID-19 cases. Such emergency factors have gone beyond our expectations. As a result, the Chinese economy suffered a certain degree of fluctuations. Following a better-than-expected recovery in January and February, major economic indicators declined markedly due to international factors and the pandemic impact at home in March and April; then, since May, economic performance has been gradually stabilizing and rebounding, and much more positive changes have been taking place as a package of policy measures to stabilize the economy and control the pandemic in a coordinated manner gradually pay off. The main characteristics are as follows.

First, the economy managed to grow against a headwind. Since the beginning of this year, the international situation has become increasingly complex and grave, and the global economy has slowed down evidently; at home, frequent and sporadic pandemic cases have dealt a heavy blow to economic stability. The downward pressure the Chinese economy faces added greatly in April particularly. In response, all localities and departments have followed the decisions and arrangements of the CPC Central Committee and the State Council to effectively coordinate pandemic control and socioeconomic development. We have stepped up macroeconomic policy adjustment and rolled out a package of policy measures to stabilize the economy, thus effectively stabilizing the economy's fundamentals and scoring growth in the second quarter. China's GDP grew 2.5% in the first half year and 0.4% in the second quarter, which was hard won given the decline in major production and demand indicators in April and May. It showed the strong resilience of the Chinese economy.

Second, prices have remained stable on the whole. Affected by geopolitical conflicts and increased liquidity of the world's major economies, the prices of major commodities, especially those of grain and energy, have remained high, adding to the impact of imported inflation on China. Against such a backdrop, China has stepped up market supply to stabilize prices, worked hard to ensure grain and energy output, and thus managed to keep domestic prices stable. In the first half year, consumer prices rose by 1.7% year on year, lower than the whole-year target of around 3%. The core CPI, excluding food and energy prices, remained stable by gaining 1% yearly. Rising prices in China have been much lower than that of Europe and the United States, providing favorable conditions for stabilizing the economy and improving the people's wellbeing.

Third, employment and people's livelihood have been guaranteed. Due to the epidemic outbreak, the employment pressure has risen sharply this year, and increasing personal income and ensuring people's wellbeing have become more difficult. Focusing on addressing acute issues, government authorities and departments continued to step up efforts to provide employment stability and strengthen efforts to meet people's basic living needs. Progress has been made in this regard. In the first half of the year, the newly increased employed people in urban areas totaled 6.54 million. The surveyed unemployment rate in urban areas has fallen for two consecutive months since May, reversing the earlier upward trend. In June, the rate dropped to 5.5%. The surveyed unemployment rate of the population aged 25 to 59 was 4.5%, roughly the same as in January. People's income has increased steadily. In the first half of the year, personal per capita disposable income increased by 3% in real terms year on year, slower than the first quarter but faster than the economic growth. The national per capita net income from transfers witnessed a nominal growth of 5.6%, a 0.9 percentage point higher than the growth rate of total income.

Fourth, China's foreign trade has shown resilience. The impetus for global trade growth has been weakening since the beginning of this year. The new export order index of the worldwide manufacturing PMI has been below the 50-point mark for four consecutive months. However, China's foreign trade has maintained rapid growth, overcoming the adverse effects of the tightening external environment and the epidemic outbreak, which showed the strong resilience of China's foreign trade. In the first half of the year, the total volume of trade in goods grew by 9.4% year on year, with exports up by 13.2%. The total volume of trade in goods grew by 14.3% in June year on year, up 4.7 percentage points from the previous month.

Fifth, the momentum of transformation and upgrading has continued. Despite the complex and grim external environment and growing downward pressure on the domestic economy, China continued to boost innovation-driven development and the momentum of transformation and upgrading remains unchanged, with the new impetus growing fast. In the first half of the year, the value added of high-tech manufacturing enterprises above the designated size went up by 9.6% year on year, and the investment of high-tech industries grew by 20.2% year on year, maintaining fast growth. The online retail sales of physical goods went up by 5.6%, accounting for 25.9% of the total retail sales of consumer goods. The structure of the Chinese economy has been adjusted and improved. The value-added of the manufacturing sector accounted for 28.8% of the GDP in the first half of the year, up a 0.7 percentage point year on year. The per capita income of urban households was 2.55 times that of rural households, 0.06 less than last year. We continued to promote the green transformation. The share of clean energy consumption increased by 1.3 percentage points in the first half of the year, and the output of new energy vehicles and solar batteries grew by 111.2% and 31.8% respectively.

In general, the country's economy has maintained growth by overcoming difficulties in the year's first half, showing the recovery momentum. However, the recovery of the domestic economy is still facing many challenges due to the complex and grim external environment. Next, following the decisions and deployment of the CPC Central Committee and the State Council, we will effectively coordinate epidemic control and prevention and economic and social development and promote the implementation of policies and measures to stabilize growth to promote sustained and sound economic development. Thank you.

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Reuters:

China's GDP in the first half year went up by 2.5%, much lower than the annual growth target of around 5.5%. What do you think of the recovery momentum in the year's second half? Will new measures to stabilize growth be rolled out, especially in boosting consumption and private investment? Thank you.

Fu Linghui:

Thank you for your questions. In the first half of the year, the Chinese economy was affected by the complex and grim external environment and the epidemic resurgence. With concerted efforts of all sectors, we maintained a hard-won positive economic growth in the second quarter. For the next stage, stagflation risks of the global economy are rising, and there are still many unstable and uncertain factors in the recovery of the domestic economy. But China's economy has strong resilience and great potential, and its long-term positive trend has not changed. By implementing policies and measures to stabilize growth, China's economy is expected to improve gradually.

First, the country's economy has resilience. Despite the shocks caused by the epidemic resurgence, the country's economic aggregate remained considerable and enjoyed the advantages of a solid material foundation and a super-large market. The economic aggregate reached 56 trillion yuan in the year's first half, with the industrial added value approaching 20 trillion yuan, the value added created by the service sector exceeding 30 trillion yuan, and the fixed-asset investment exceeding 27 trillion yuan. Retail sales dropped slightly but still exceeded 21 trillion yuan. All these figures have strengthened our strength and confidence in coping with various risks and challenges.

Second, there is potential for the recovery of demand. In terms of investment, we continued to make efforts to stabilize investment, with the issuance and use of special bonds being accelerated, significant projects being advanced, and investment in infrastructure being boosted. Investment is expected to play a more prominent role in stabilizing growth. In the first half of the year, infrastructure investment grew by 7.1% year on year, a 0.4 percentage point higher than in the first five months. Regarding leading indicators, total planned investment in new projects rose 22.9% year on year in the first half of the year, maintaining rapid growth. In terms of consumption, as the epidemic prevention and control improved, offline consumption scenarios gradually recovered. Consumption is expected to continue to recover, fueled by policies to promote consumption. The country's imports and exports have strong resilience in terms of foreign trade. We continue to encourage smooth freight and logistics services. The imports and exports of the Yangtze River Delta region have recovered quickly, the business environment at ports has continued to improve, and there is a good foundation for maintaining steady and high-quality growth of foreign trade. The imports and exports rose 9.5% in May year on year, up 9.4 percentage points from April. The imports and exports rose 14.3% in June year on year, up 4.8 percentage points from May.

Third, there are pillars for production recovery. In terms of industries, the total value added of the industrial enterprises above the designated size resumed positive growth in May, up 0.7% year on year and up 3.9% year on year in June. As the resumption of work and production is accelerated and bottlenecks in industrial and supply chains are unclogged, the leading role of key sectors, such as the auto and electronic industries, is expected to grow. In particular, the accelerated recovery of production in areas heavily affected by the epidemic in the second quarter has contributed to the stable industrial growth. The manufacturing purchasing manager's index (PMI) climbed above the tipping point again in June. The Production and Operation Expectation Index rose to 55.2%, showing the confidence of manufacturing companies has continued to grow. In terms of the service sector, as the epidemic prevention and control improved, the service production reversed the decline in June, with the Index of Services Production shifting from decline to an increase of 1.3% year on year, with the recovery momentum of the contact and cluster industries being apparent. As life and work quickly return to normal, service market demand has gradually picked up, business confidence has recovered, and the service sector is expected to improve. In June, the PMI for services was 54.3%, a return to expansionary territory. The Business Activity Expectation Index for services was 61%, rising for the second consecutive month. In terms of transport and logistics, smooth transport and logistics services have supported the further recovery of production. Freight turnover rose 5.7% in June year on year, up 2.3 percentage points from the previous month. The logistics performance index (LPI) was 52.1%, up 2.8 percentage points from the last month.

Fourth, innovative development injects growth impetus. In recent years, China has further put into action the innovation-driven development strategy, vigorously promoted industrial transformation and upgrading, and effectively boosted new drivers of growth. Due to the COVID-19 pandemic, traditional industries have made a faster shift to digital-driven, internet-based, and smart-tech models, and new industries and new drivers have continued to maintain their steady and rapid growth, offering continuously enhanced support to the economic growth and being conducive to promoting the sustained recovery of the economy. In the second quarter, the value-added of high-tech manufacturing enterprises above the designated size increased by 5.7% year on year, 5 percentage points faster than the growth rate of industries above the designated size. The added value of information transmission, software and information technology service industries increased by 7.6%, 7.2 percentage points higher than the growth rate of the GDP.

Fifth, macro policies have helped guarantee growth. Since the second quarter, facing downward pressure on the economy, the CPC Central Committee and the State Council have timely issued 33 policies and measures in six aspects to stabilize the growth. All regions and departments have responded quickly and implemented these policies and measures in an effective way. In June, the State Council further strengthened its deployment and called for accelerating the solid implementation of a package of policies and measures to stabilize the economy. From the recent situation of the economic operation, we can see investment in infrastructure has been accelerated significantly, the consumption of bulk commodities such as automobiles has notably rebounded, the flow of logistics and people has become smoother, the expectation and confidence of enterprises have gradually improved, and the policies to ensure stable growth have been working effectively. In the next stage, the intended effect of policies such as refunding large-scale VAT credits, issuing and using special bonds, and strengthening the financial support for the real economy will continue to be unleashed, helping promote sustained recovery and sound development of the economy.

In general, as the epidemic prevention and control situation has improved and the policies have shown effects, China will further harness its strengths as a large economy with broad market space, strong development resilience, sufficient reform dividends, and strong governance capacity, and China's economy is expected to continue to recover. We should also notice that there are still instability and uncertainties in the external environment, and China is under the triple pressures of shrinking demand, disrupted supply, and weakening expectations. Therefore, we need to continue to make unremitting efforts to stabilize the macroeconomic performance and promote the sustained recovery of the economy. Thank you.

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CNR:

We have noticed that in the first half of the year, the economy in some regions was severely affected by the COVID-19 epidemic, so how about their current situation? Moreover, how about the performance of China's regional economy on the whole? What are your comments? Thank you.

Fu Linghui:

Thanks for your questions. Indeed, since the first half of this year, the epidemic has had a severe impact on the economic operation of some regions. However, it should be noted that the impact is short-term and external and will not change the general and coordinated development trend of the regional economy. In the first half of the year, especially in the second quarter, our well-coordinated efforts to respond to COVID-19 and pursue economic and social development have witnessed positive effects. With the implementation of a package of policies and measures to stabilize growth, China's economy has gradually overcome the adverse impact brought about by the epidemic and accelerated its recovery. Positive changes have been witnessed in some regions that were hit hard by the epidemic.

First, in the second quarter, the economy of most regions was basically stable. In terms of growth, in the second quarter, among the country's 31 provinces (autonomous regions and municipalities), 26 of them maintained their GDP growth, accounting for 83.9% of the total number. From the perspective of employment, the surveyed urban unemployment rate of 19 provinces (autonomous regions and municipalities) in the second quarter was lower than the national average, of which the surveyed urban unemployment rate of the western region was 5.5%, 0.3 percentage points lower than the national average level. In terms of prices, the price rise in most regions was moderate, and the consumer prices in 30 provinces (autonomous regions and municipalities) rose less than 3% year on year in the second quarter

Second, central and western regions saw sound economic growth. In the second quarter, the GDP of central and western regions increased by 2.3% and 2% year on year, respectively, both faster than that of the whole country. In the first half of the year, the growth of central and western regions was faster than that of the eastern region, with their added value of industries above designated size both increasing by 7.3% year on year, 5.1 percentage points faster than that in the eastern region. Fixed asset investment in central and western regions increased by 10.7% and 8%, respectively, faster than that in the eastern region by 6.2 and 3.5 percentage points, respectively.

Third, some areas were hit hard by the epidemic. The normal order in work and life in these regions was affected to a certain extent, thus, the local economy declined, and the unemployment rate increased in the short run. In the second quarter, the GDP of Shanghai and Jilin fell by 13.7% and 4.5% year on year, respectively, while the surveyed urban unemployment rate in Shanghai and Jilin stood at 12.5% and 7.6%, respectively, significantly higher than the national level.

Fourth, the economy of regions hit hard by the epidemic accelerated the recovery. Although the economy of some regions in the second quarter was severely affected by the epidemic, on a monthly basis, the main economic indicators in these areas improved notably in June. These improvements were made when the epidemic response was moving in a positive direction, and enterprises sped up their resumption of work and production. The added value of industries above the designated size in Shanghai and Jilin increased by 13.9% and 6.3% year on year in June, and fell by 30.9% and 4.9%, respectively in May. In terms of consumption, retail sales of units above designated size in Jilin increased by 5.5% in June and fell by 1.5% in May. In terms of employment, the surveyed urban unemployment rates in Shanghai and Jilin fell by 9.7 and 0.8 percentage points respectively in June compared with those in May, indicating that the economic recovery in these regions is steadily accelerated.

Generally speaking, the economy in most regions of China is stable. The growth rate of central and western regions is faster than that of the eastern region, while the trend of regional coordinated development has not changed. Some regions have encountered temporary difficulties due to the epidemic; however, as various policies and measures have been implemented to stabilize the economy, their economy has accelerated the recovery. Of course, we should also see that the problem of unbalanced economic development in China is still prominent, and the development gap between regions is large. Going forward, we will continue to implement major regional development strategies and coordinated regional development strategies, narrow the regional gap, and promote coordinated and sustainable economic development. Thank you.

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Bloomberg:

My question is about the industrial output. Looking at the headline numbers, the rise is 3.9%. But if you look at the breakdown, according to my calculations, the electricity output only rose 0.1%, rolled steel output fell 3.7%, cement output fell over 17%, flat glass only rose 0.2%, semi-conductors fell, ores fell, smart production fell, what rose to drive total industrial output up 3.9% when so many industrial goods output fell over the same period? Thank you.

Fu Linghui:

This year, affected by the epidemic, industrial production declined in April, increased from the decline in May, and the growth rate accelerated notably in June. From the output and added value of industrial products, we can see the production of the auto industry rebounded remarkably in June. The industrial chain of the auto industry in the Yangtze River Delta was affected to a certain extent earlier this year due to the epidemic. However, as the economy in Shanghai and other regions has begun to recover recently, the production growth of the auto industry is accelerating both in its output and its added value compared with those in May, contributing to the rise of industrial production in June. You just talked about the decline of some products. However, in general, we see growth according to statistics for over 500 products, so we can tell that industrial production rebounded in June. From the perspective of structure, the equipment manufacturing industry rebounded remarkably. In particular, the rise of the auto industry has contributed greatly to the growth of the whole industry. As the economy gradually recovers, other industries have also played their supporting roles in the overall industrial growth. Thank you.

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Cover News:

The surveyed unemployment rate of young people aged 16-24 hit a new high this year. Can you give a detailed introduction to the current employment situation of young people? What is your prediction of the employment situation in the next stage? Will it be possible to achieve the annual target of adding more than 11 million jobs?

Fu Linghui:

Thank you for your questions. Employment is a matter of concern because it is the foundation of people's livelihoods. Since the beginning of this year, factors such as the complex and severe international environment and the impact of the domestic epidemic have had a certain impact on employment. In general, with the joint efforts of all parties, the economy has been recovering and various employment stabilization policies have been implemented, reversing the rising trend of surveyed urban unemployment. Due to various factors, the surveyed urban unemployment rate rose to 6.1% in April. But as the epidemic prevention and control situation improves, the rate has dropped for two consecutive months since May. In May, the rate was 5.9%, down 0.2 percentage points from the previous month, and it further fell to 5.5% in June. Looking at the situation in the second quarter, the employment situation mainly has the following characteristics:

First, the employment of the main working population is generally stable. Although the unemployment rate of the main working population aged 25-59 increased in April, the increase was significantly lower than the overall unemployment rate. In June, the unemployment rate among those aged 25-59 was 4.5%, a decrease of a 0.6 percentage point from the previous month and close to the average level in 2021.

Second, the employment situation of rural migrant workers has improved. Migrant workers are mostly engaged in labor-intensive manufacturing and service industries, are mostly self-employed, and have flexible employment, so their employment stability is relatively poor. Affected by the impact of the epidemic, the unemployment rate of the migrant population with rural household registration rose to 6.6% in April. As the epidemic is gradually brought under control and measures to help enterprises stabilize jobs begin to deliver, the employment of migrant workers has improved significantly. The unemployment rate of the migrant population with rural household registration dropped to 6.2% in May and 5.3% in June, lower than the overall unemployment rate.

Third, the employment pressure on young people is still relatively high. When young people enter the labor market for the first time, they face a frictional unemployment dilemma. At the same time, affected by the epidemic, the ability of enterprises to absorb employment has declined, and young people's job-seeking channels have also been hindered amid the epidemic. In addition, the total number of college graduates this year has reached a record high, intensifying the employment pressure on young people. In June, the youth unemployment rate for the16-24 age group in urban areas was 19.3%, the highest level for this year.

In general, with the economy's recovery and effective employment stabilization policies, China's employment situation showed an overall improvement trend in the second quarter. However, the problem of youth employment pressure is still prominent. We must continue stabilizing employment, especially the employment of key groups. We must further implement the employment stabilization policies and offer employment assistance to promote the continuous improvement of the employment situation. Thank you.

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Financial Times:

You mentioned that fixed asset investment continued to improve in the second quarter. Meanwhile, cement production dropped by 12.9% in June. The asphalt production rate also showed a relatively historical low. So how to understand such a contrast? What are your expectations for future infrastructure investment? Thank you.

Fu Linghui:

Thanks for your questions. Since the beginning of this year, people have paid high attention to investment and related investment products. In recent years, in terms of China's investment in three major sectors, investment in manufacturing has seen the fastest growth, with a growth rate of more than 10% in the first half of this year. Among the manufacturing industry, high-tech manufacturing grew by more than 20%. From the structure perspective, China's economic and industrial development is gradually upgrading, and the drive for industrial-upgrading-related products is relatively obvious. In contrast, investment growth in some traditional industries has gradually slowed down. With the continuous advancement of high-quality development of China's industrial upgrading and development and continuously innovative development in the future, the driving force for equipment manufacturing and high-tech-related products is increasing. Therefore, in general, although China's economy has been hit by the epidemic this year, the trend of industrial development and upgrading and high-quality development has not changed. Employment and prices are generally stable. Judging from these circumstances, the trend of China's economy to maintain a steady growth and move towards high-quality development will not change in the future. Thank you.

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Asahi Shimbun:

If there were no COVID-19 impact, what would the potential growth rate of China's economy have been? How do you see the possibility of economic recovery in the second half of the year for achieving the full-year GDP growth target of 5.5%? Thank you.

Fu Linghui:

Thank you for your questions. Many institutions and scholars have made calculations regarding the potential growth rate of China's economy, and the calculation results are somewhat different. Generally speaking, most conclusions agree that the potential growth rate of China's economy at this stage is about 5%-6%. As China's economy grows larger and the constraints on labor, resources, and the environment become stronger, the potential growth rate will gradually decrease. However, from a global perspective, the potential growth rate of 5%-6% is still at a medium and high level. Especially under the conditions of such a large economy as China, it is very difficult to maintain medium- and high-level growth, which also shows that China's economic growth potential is still relatively large.

China is still the largest developing country in the world. Although China's per capita GDP has exceeded $10,000, there is still a big gap compared with the per capita level of more than $40,000 in developed countries. This gap means a huge space and potential for the future development of China's economy. It should be pointed out that due to the complex and severe international environment, compounded by the COVID-19 pandemic unseen in a century, the adverse currents encountered by globalization, and the critical period for China's economic restructuring, it is increasingly difficult for China's economic growth to reach its potential level. To maintain steady economic growth, we still have to work hard. In the first half of this year, China's economy overcame unexpected factors and maintained growth, which was an uphill battle. The risk of stagflation in the world economy is on the rise, external instability and uncertainties are increasing, and the triple pressures of shrinking domestic demand, supply shocks, and weakening expectations still exist. Achieving the expected economic growth target for the whole year is challenging. However, it should also be noted that the fundamentals that sustain China's long-term economic growth have not changed, the economy still shows strong resilience, the macro policy adjustment tools are abundant, and there are many favorable conditions for promoting sustained economic recovery. In the second half of this year, with the efficient coordination of COVID-19 response and socioeconomic development, and various economic recovery policies and measures yielding tangible results, China's economy is expected to continue to rebound and perform within a reasonable range. Next, we must seize the favorable opportunity for economic recovery, coordinate COVID-19 response and economic and social development following the overall requirements of preventing the epidemic, stabilizing the economy, and developing safely, and ensure policies and measures to stabilize the economy continue to yield results, so that we can consolidate the foundation for economic recovery, and maintain sustainable and healthy economic development. Thank you.

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Cover News:

The CPI in June hit a two-year high. As the "hog cycle" has entered the upward trajectory, will inflationary pressures intensify in the second half of the year? What measures will the government take to keep prices within a reasonable range? Thank you.

Fu Linghui:

Thank you for your question. Since the beginning of this year, global inflationary pressures have risen, and domestic concerns about prices have also increased. As the domestic market demand has gradually recovered, coupled with imported factors from abroad, the year-on-year growth of the CPI continues to increase but remains moderate. In the first half of the year, the CPI went up by 1.7% year on year, with food prices down 0.4% and non-food prices up 2.2%. In the second quarter, CPI growth was generally stable, up 2.3% year on year. On a monthly basis, the CPI went up by 2.1% year on year both in April and May, up 2.5% in June. In the second quarter, CPI changes have the following features:

First, food prices rose after a fall. Food prices rose 2.3% in the second quarter after a 3.1% drop in the first quarter. This can be explained by an intensified price increase in fresh fruit, fresh vegetables, eggs, and grain and a rally in pork prices. Pork prices decreased by 21.3% in the second quarter, 20.5 percentage points lower than the previous quarter.

Second, industrial consumer prices have increased at a quicker pace. In the second quarter, industrial consumer prices went up by 4.1% year on year, 1.1 percentage points higher than that of the first quarter. This was mainly affected by international import factors; prices of some energy products have continued to rise, with gasoline and diesel prices rising 30% and 32.8%, respectively, year on year in the second quarter.

Third, the rise in service prices has moderated. Affected by factors such as the epidemic, the demand for services has been weak, which dragged down the increase in service prices. Service prices went up by 0.8% year on year in the second quarter, 0.5 percentage points lower than that in the first. The price increases of airline tickets and tourism have all declined. June's CPI went up by 2.5% year on year, mainly due to the lower base in the previous year. Among the 2.5% year-on-year increase in June, the carryover effect accounted for 1.2 percentage points, 0.4 percentage points higher than the previous month, while the influence of new factors was about 1.3 percentage points, the same as the previous month. In terms of industry, food prices went up 2.9% year on year, 0.6 percentage points higher than last month, mainly due to the narrowed drop in pork prices. Energy prices went up 17.4%, an increase of 2.7 percentage points, mainly due to the impact of rising gasoline and diesel prices. Core CPI, excluding the prices of food and energy, went up by 1%, 0.1 percentage points higher than last month, indicating that supply and demand have stabilized.

From the international perspective, China's inflation has been significantly lower than that of European and American countries, mainly because China has not implemented massive stimulus policies. Facing imported inflation, we stepped up efforts to ensure supply and stabilize prices at home. In addition, grain production has been strengthened, and China has reaped a summer grain harvest this year. Summer grain production increased by 1% over the previous year, which meant that the CPI was generally stable. Price stability is not only conducive to the smooth operation of the economy but also to the improvement of people's livelihoods.

As for whether rising pork prices will affect the overall increase of the CPI, generally speaking, the impact has been limited. At present, hog production capacity has returned to normal, and their prices are not expected to rise sharply. More supply is expected as pigs that were previously put on hold will be brought into the market. In addition, relevant departments will strengthen market regulation and stabilize supply and the demand, which will help ensure stable prices.

Next, as we enter the flood season, the supply of fresh products from certain areas might be affected, and the influence of imported factors may also continue, but the capacity of supplying products and services has been sufficient, and prices are expected to maintain a moderate upward trend. Thank you.

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ThePaper.cn:

You mentioned that the growth rate of industrial value-added above designated size turned from negative to positive in May and continued to increase in June. The spread of COVID-19 in many parts of China has brought uncertainties to economic and social development. What do you think of the current resumption of work and production in China? What is the prediction for the recovery of the industrial economy in the second half and for the whole year? Thank you.

Fu Linghui:

In the first half of the year, due to unexpected factors both at home and abroad, the monthly year-on-year growth rate of industrial production decreased in April. However, since May, industrial production has continued to rebound as the measures to coordinate epidemic prevention and control and economic and social development have taken effect, and the measures to stabilize industrial economic operations have also delivered their desired effect. In the first half of the year, the value added of industrial enterprises above designated size increased by 3.4% year on year. In the second quarter, industrial production stopped its decline and turned positive. In the second quarter, the value added of industrial enterprises above designated size increased by 0.7% year on year, specifically a 2.9% decrease in April and a 0.7% increase in May, before a strong rally of 3.9% in June, hinting at a recovery. This recovery mainly showed in the following aspects:

First, the mining industry has maintained rapid growth. Energy supplies and price stability continued to be promoted, and relevant industries continued to grow fast, driving the value-added growth of the mining industry. In the second quarter, the value added growth of the mining industry grew by 8.4% year on year, with double-digit growth in the coal mining and washing industries, which were both significantly faster than the growth of all industries above designated size.

Second, value-added figures in high-tech manufacturing enterprises have demonstrated stable growth. Despite adverse effects such as the impact of the epidemic, the trend for industrial upgrading and development has not changed, and high-tech manufacturing has grown rapidly. In the second quarter, the value added of high-tech manufacturing above designated size increased by 5.7% year on year, higher than that of other industries above designated size, which has shown remarkable resilience.

Third, the export of industrial products played an active role in driving economic growth. China has a robust industrial production capacity and international competitiveness, and the export of industrial products maintained rapid growth. In the second quarter, the export delivery value of industrial enterprises above the designated size achieved a year-on-year increase of 8.2%, with a rise of 15.1% in June, which was 4 percentage points higher than that of the previous month.

Fourth, industrial production in the central and western regions was generally stable. In the second quarter, although parts of the eastern and northeastern areas were significantly affected by COVID-19, the industrial production in the central and western regions was generally stable, supporting the industrial production. In the second quarter, the added value of industrial enterprises above the designated size in the central and western regions rose by 5.9% and 6%, respectively. The growth rate was higher than the added value of industrial enterprises above the designated size nationwide.

According to the statistics in June, with a series of policies to ensure stable growth taking effect, industrial production rebounded markedly. First, the growth rate rebounded in most sectors and regions. In June, the growth rate of 27 of the 41 major industries rebounded from the previous month, accounting for 65.9%. The growth rate of industrial enterprises above the designated size in 21 regions of 31 provinces (autonomous regions, municipalities) rebounded, accounting for 67.7%. Second, the growth rate of the equipment manufacturing industry accelerated. As barriers in the industrial and supply chains have been gradually removed, the production in the automobile manufacturing sector rebounded significantly, driving rapid growth in the equipment manufacturing industry. In June, the added value of the equipment manufacturing industry rose by 9.2% year on year, 8.1 percentage points higher than the previous month, with the automobile manufacturing sector increasing by 16.2%, which had decreased by 7% during the last month. Third, the industrial production in the areas hit hard by COVID-19 in the early stage recovered significantly. In June, the added value of industrial enterprises above the designated size in Shanghai and Jilin province grew by 13.9% and 6.3%, respectively, dropping by 30.9% and 4.9% in the previous month.

All these statistics show that industrial production is steadily recovering; the impact of external shocks such as COVID-19 is gradually subsiding; production operations are improving at a faster pace. Industrial production plays a more vital role in supporting the economy, and industrial upgrading continues its good momentum, enhancing the quality of industrial development. However, it should be noted that currently, barriers still exist between industrial production and sales, enterprises in some industries face many difficulties, and it still requires continuous efforts to stabilize the industrial economy. In the next stage, measures will be taken to implement policies to ease the challenges of businesses fully. These include strengthening open and smooth logistics services, removing barriers in industrial and supply chains, and supporting enterprises in pursuing innovative development. These measures will ensure the stable performance of industrial production. Thank you.

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Shou Xiaoli:

The last question, please.

National Business Daily:

In April, the year-on-year growth rate of total retail sales in China reached the lowest point in the year's first half. Since then, May and June have witnessed a rebound in the growth rate. Does that mean that the turning point of this year's V-shaped consumption recovery has passed? Is the rapid rebound in consumption related to a short-term stimulus caused by distributing consumption coupons in many places? How does the National Bureau of Statistics predict the consumption trend in the second half of this year? Thank you.

Fu Linghui:

Thank you for your questions. The issue of consumption is of great concern to the people. Since the beginning of this year, various factors have affected consumption growth. In the first half of this year, affected by multiple and sporadic local resurgences of COVID-19, market sales declined, especially with a marked decline in service consumption. In the first half of this year, the total retail sales of consumer goods dropped by 0.7% year on year. However, since May, as COVID-19 has been effectively contained and the policy to boost consumption has taken effect, market sales have grown steadily. The total retail sales in May fell by 6.7% year on year, 4.4 percentage points less than the previous year's decrease. In June, the growth rate shifted from a decline to an increase of 3.1% year on year.

Based on the situation in the first half of this year, the market sales mainly showed the following characteristics:

First, the consumption of goods for basic living registered rapid growth. In the first half of this year, the retail sales of grain, oil, food, and beverage grew by 9.9% and 8.2%, respectively, ensuring people's consumption for basic living.

Second, online retail sales grew steadily. In the first half of this year, the online retail sales of physical goods increased by 5.6%, accounting for 25.9% of the total retail sales of consumer goods.

Third, service consumption dropped. Under the impact of the pandemic, service consumption fell markedly. In the first half of this year, the catering revenue decreased by 7.7% year on year. Service consumption such as traveling also declined.

According to the situation in June, positive changes have occurred in domestic market sales.

First, most of the goods saw an increase in retail sales growth rates. In June, nearly 90% of the 18 categories of goods of enterprises above designated size witnessed rebounds in retail sales compared with the previous month. Among them, the growth rates of the retail sale value of clothing and daily necessities rebounded significantly. Furthermore, retail sales of cosmetics and communication appliances increased by 8.1% and 6.6%, respectively.

Second, the consumption of major commodities played a significant role in driving growth. The introduction and implementation of policies to promote consumption in critical areas such as halving the purchase tax for eligible passenger vehicles, boosted the sales of major commodities like automobiles and home appliances. In June, the retail sales of automobiles, home appliances and audio-visual equipment of enterprises above the designated size rose by 13.9% and 3.2%, respectively, a marked increase from the previous month, driving the growth rate of the retail sales of consumer goods in June by over 1.5 percentage points.

Third, service consumption such as catering was significantly improved. As people gradually increased their out-of-home consumption, service consumption improved as a result. In June, the catering revenue fell 4% year on year, compared with a 21.1% decline in the previous month. The number of domestic tourism trips and income during the Dragon Boat Festival holiday was much better than during the May Day holiday.

Fourth, the consumption in areas struck by COVID-19 rebounded rapidly. In June, the retail sales of goods of enterprises above the designated size in Shanghai decreased by 2.1% year on year, shrinking from the 44.1% decline registered in the previous month. Meanwhile, the retail sales of goods of enterprises above the designated size in Jilin province grew by 5.5%, compared with a decrease of 1.5% in the previous month.

In general, since May, domestic consumption has withstood the impact of COVID-19 and showed recovery momentum, with significantly more positive changes taking place. Although recovery in consumption is still facing constraints such as the slowdown in the growth of personal income and the limited consumption scenarios, the trend of expansion in the consumption scale, upgrading within the consumption structure, and innovation in the consumption model will not change. With improved social security and support of policies to stabilize employment and promote consumption, China's consumption is expected to sustain a sustained recovery. Thank you.

Shou Xiaoli:

Thank you to Mr. Fu Linghui and friends from the media. Today's briefing is at this moment concluded. Goodbye.

Translated and edited by Yuan Fang, Zhang Rui, Zhou Jing, Huang Shan, Liu Qiang, Xu Kailin, He Shan, Yan Xiaoqing, Wang Qian, Zhang Liying, Yang Xi, Li Huiru, David Ball, Tom Arnsten, and Jay Birbeck. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.