SCIO briefing on China's economic performance of first half of 2023

Speaker:

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

Chairperson:

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

Date:

July 17, 2023

Shou Xiaoli:

Ladies and gentlemen, good morning. Welcome to today's press conference held by the State Council Information Office (SCIO). This is a regular briefing on economic data. We are delighted to be joined by Mr. Fu Linghui, spokesman of the National Bureau of Statistics (NBS) and director general of the Department of Comprehensive Statistics of the NBS, to brief you on the national economic performance of the first half of 2023, and to take your questions.

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

Fu Linghui:

Thank you, Ms. Shou. I'm very glad to attend today's press conference. I'll first brief you on the main economic data of the first half of this year and then take your questions.

In the first half of this year, the Chinese economy has shown encouraging recovery momentum. In the first half of this year, faced with a complex and grave international environment as well as arduous tasks to advance reform and development, and ensure stability at home, 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 strictly implemented the decisions and arrangements made by the CPC Central Committee and the State Council, adhered to the general working guideline of making progress while maintaining stability, fully and faithfully applied the new development philosophy on all fronts, accelerated the efforts to foster a new development pattern, focused on promoting high-quality development, better balanced domestic and international imperatives, coordinated the work of COVID-19 prevention and control with economic and social development, ensured both development and security, and gave priority to ensuring stable growth, employment and prices. As a result, market demand gradually recovered, production supply continued to increase, employment and prices were generally stable, and residents' income grew steadily. The national economy showed a good momentum of recovery.

According to preliminary estimates, the gross domestic product (GDP) in the first half of the year reached 59,303.4 billion yuan, up by 5.5% year on year at constant price, 1.0 percentage point faster than that in the first quarter of 2023. By industry, the value added of the primary industry was 3,041.6 billion yuan, up by 3.7% year on year; that of the secondary industry was 23,068.2 billion yuan, up by 4.3%; and that of the tertiary industry was 33,193.7 billion yuan, up by 6.4%. By quarter, GDP grew by 4.5% year on year in the first quarter and 6.3% in the second quarter. GDP in the second quarter was up by 0.8% quarter on quarter.

1. Agricultural production was stable and animal husbandry grew steadily.

In the first half of 2023, the value added of agriculture (crop farming) witnessed a year-on-year increase of 3.3%. The summer grain had another harvest. The total output of summer grain was 146.13 million metric tons, 1.274 million metric tons less than that of the previous year, or down by 0.9%, but still the second highest amount in history. In the first half of the year, the output of pork, beef, mutton and poultry was 46.82 million metric tons, up by 3.6% year on year. Of this total, the outputs of pork, beef, mutton and poultry increased by 3.2%, 4.5%, 5.1% and 4.3%, respectively. The output of milk was up by 7.5% and that of eggs grew by 2.9%. At the end of the second quarter, the number of pigs registered in stock was 435.17 million, up by 1.1% year on year; and in the first half of the year, 375.48 million pigs were slaughtered, up by 2.6%.

2. Industrial production recovered gradually and equipment manufacturing grew quickly.

The total value added of industrial enterprises above designated size grew by 3.8% year on year in the first half year, or 0.8 percentage point faster than that in the first quarter. In terms of sectors, the value added of mining increased by 1.7% year on year, that of manufacturing increased by 4.2%, and that of the production and supply of electricity, thermal power, gas and water increased by 4.1%. The value added of equipment manufacturing increased by 6.5%, 2.7 percentage points faster than that of the industrial enterprises above designated size. Analysis by types of ownership showed that the value added of state holding enterprises rose by 4.4% year on year; that of share-holding enterprises was up by 4.4%; that of enterprises funded by foreign investors or investors from Hong Kong, Macao and Taiwan was up by 0.8%; and that of private enterprises was up by 1.9%. In terms of products, the production of solar cells, new-energy automobiles and industrial control computers and systems increased by 54.5%, 35.0% and 34.1%, respectively. In June, the value added of industrial enterprises above designated size grew by 4.4% year on year, or up by 0.68% month on month. In June, the Manufacturing Purchasing Managers' Index stood at 49.0%, and the Production and Operation Expectation Index was 53.4%.

3. The service sector grew quickly and services involving contacts and gatherings improved significantly.

In the first half of the year, the value added of services went up by 6.4% year on year, 1.0 percentage point faster than that in the first quarter. Specifically, the value added of accommodation and catering, information transmission, software and information technology services, leasing and business services, financial intermediation, and wholesale and retail grew by 15.5%, 12.9%, 10.1%, 7.3% and 6.6%, respectively. In June, the Index of Services Production increased by 6.8% year on year. Specifically, the Index of Services Production of accommodation and catering, information transmission, software and information technology services, and leasing and business services went up by 20.0%, 15.4% and 9.3%, respectively. In the first five months, the business revenue of service enterprises above designated size grew by 8.5% year on year. In June, the Business Activity Index for Services stood at 52.8%, and the Business Activity Expectation Index was 60.3%. Among these, the Business Activity Index for industries like air transportation, express mail services, telecommunication, broadcast, television and satellite transmission services, monetary and financial services, and insurance were within the high expansion range of 60.0% and above.

4. Market sales registered good momentum of growth and sales of upgraded goods accelerated.

In the first half of the year, the total retail sales of consumer goods reached 22,758.8 billion yuan, up by 8.2% year on year, 2.4 percentage points faster than that of the first quarter. Analyzed by different areas, the retail sales of consumer goods in urban areas reached 19,753.2 billion yuan, up by 8.1% year on year, and that in rural areas was 3,005.6 billion yuan, up by 8.4%. Grouped by consumption patterns, the retail sales of goods were 20,325.9 billion yuan, up by 6.8%; and the income of catering was 2,432.9 billion yuan, up by 21.4%. Goods for basic living enjoyed stable growth, with the retail sales of clothes, shoes, hats and textiles and of grain, oil and food by enterprises above designated size up by 12.8% and 4.8%, respectively. The sales of upgraded goods grew quickly. The retail sales of gold, silver and jewelry, of sports and recreation goods, and of cosmetics by enterprises above designated size went up by 17.5%, 10.5%, and 8.6%, respectively. Online retail sales reached 7,162.1 billion yuan, up by 13.1% year on year. Specifically, the online retail sales of physical goods were 6,062.3 billion yuan, up by 10.8%, accounting for 26.6% of the total retail sales of consumer goods. In June, the total retail sales of consumer goods increased by 3.1% year on year, or up by 0.23% month on month.

5. Investment in fixed assets continued to increase and investment in high-tech industries grew quickly.

In the first half of the year, the investment in fixed assets (excluding rural households) reached 24,311.3 billion yuan, up by 3.8% year on year. Specifically, the investment in infrastructure grew by 7.2%; that in manufacturing grew by 6.0%; and that in real estate development fell by 7.9%. The floor space of commercial buildings sold reached 595.15 million square meters, down by 5.3%; and the total sales of commercial buildings were 6,309.2 billion yuan, up by 1.1%. By industry, investment in the primary industry went up by 0.1%, that in the secondary industry was up by 8.9%, and that in the tertiary industry was up by 1.6%. Private investment dropped by 0.2%. Investment in high-tech industries grew by 12.5%, of which investment in high-tech manufacturing and high-tech services grew by 11.8% and 13.9%, respectively. In terms of high-tech manufacturing, investment in manufacturing of medical equipment, measuring instruments and meters and manufacturing of electronic and communication equipment grew by 16.8% and 14.2%, respectively. In terms of high-tech services, investment in professional technical services and in services for transformation of scientific and technological achievements grew by 51.6% and 46.3%, respectively. In June, investment in fixed assets (excluding rural households) grew by 0.39% month on month.

6. Imports and exports of goods continued to grow and the trade structure continued to be optimized.

In the first half of the year, the total value of imports and exports of goods was 20,101.6 billion yuan, an increase of 2.1% year on year. The total value of exports was 11,458.8 billion yuan, up by 3.7%. The total value of imports was 8,642.9 billion yuan, down by 0.1%. The trade balance was 2,815.9 billion yuan in surplus. The imports and exports of general trade increased by 4.0%, accounting for 65.5% of the total value of imports and exports, 1.2 percentage points higher than that of the same period in the previous year. The imports and exports by private enterprises grew by 8.9%, accounting for 52.7% of the total value of imports and exports, 3.3 percentage points higher than that of the same period in the previous year. The imports and exports with countries along the Belt and Road grew by 9.8%. In June, the total value of imports and exports was 3,488.3 billion yuan, down by 6.0% year on year. The total value of exports was 1,989.8 billion yuan, down by 8.3%; and that of imports was 1,498.5 billion yuan, down by 2.6%.

7. Consumer price rose year on year and producer prices for industrial products dropped year on year.

In the first half of the year, the consumer price index (CPI) rose by 0.7% year on year. Grouped by commodity categories, prices for food, tobacco and alcohol went up by 2.1%. Clothing prices increased by 0.8%. Housing prices dropped by 0.2%. Prices for articles and services for daily use rose by 0.5%. Transportation and communication prices fell by 2.3%. Prices for education, culture and recreation grew by 1.7%. Prices for medical services and health care went up by 1.0%. Prices for other articles and services increased by 2.9%. In terms of food, tobacco and alcohol prices, fresh fruit prices went up by 7.9%, pork prices increased by 3.2%, grain prices rose by 1.6%, and fresh vegetable prices dropped by 2.7%. The core CPI excluding food and energy prices grew by 0.7% year on year. In June, the country's CPI maintained the same level year on year and dropped by 0.2% month on month.

In the first half of the year, the producer prices for industrial products went down by 3.1% year on year. Specifically, the prices in June dropped by 5.4% year on year, or down by 0.8% month on month. In the first half of the year, the purchasing prices for industrial producers went down by 3.0% year on year. Specifically in June, the prices dropped by 6.5% year on year, or down by 1.1% month on month.

8. Employment was generally stable and the surveyed unemployment rate in urban areas declined.

In the first half of the year, the urban surveyed unemployment rate averaged 5.3%, down by 0.2 percentage point over that of the first quarter. In June, the surveyed unemployment rate in urban areas was 5.2%, the same as that of the previous month. The surveyed unemployment rate of population with local household registration was 5.1% and that of population with non-local household registration was 5.3%, of which, the rate of population with non-local agricultural household registration stood at 4.9%. Specifically, the surveyed unemployment rates of population aged 16-24 and 25-59 were 21.3% and 4.1%, respectively. Among the population aged 25-59, the surveyed unemployment rates of the population with junior secondary school education or below, with senior secondary school education, with junior college education, and with university education or above were 4.4%, 4.4%, 3.9% and 3.2%, respectively. The urban surveyed unemployment rate in 31 major cities was 5.5%, the same as the previous month. The employees of enterprises worked 48.7 hours per week on average. By the end of the second quarter, the number of rural migrant workers totaled 187.05 million, up by 3.2% year on year.

9. Residents' incomes increased steadily and the incomes of rural residents grew faster than that of urban residents.

In the first half of the year, the nationwide per capita disposable income of residents was 19,672 yuan, a nominal growth of 6.5% year on year, 1.4 percentage points faster than that of the first quarter; the real growth was 5.8% after deducting price factors, 2.0 percentage points faster. In terms of permanent residence, the per capita disposable income of urban households was 26,357 yuan, a nominal growth of 5.4% year on year and a real growth of 4.7%; the per capita disposable income of rural households was 10,551 yuan, a nominal growth of 7.8% year on year and a real growth of 7.2%. In terms of income sources, the nationwide per capita salary income, net business income, net property income and net income from transfers grew by 6.8%, 7.0%, 4.7% and 6.1% in nominal terms, respectively. The median nationwide per capita disposable income of residents was 16,393 yuan, with a nominal growth of 5.4% year on year.

Generally speaking, in the first half of the year, as economic and social development has fully returned to normal and macro policies have come into effect, the national economy showed a good momentum of recovery and high-quality development was advanced steadily. However, we must be aware that the international political and economic situation is intricate and complicated, and the foundation for sustained economy recovery at home is not yet solid. In the next stage, we must follow the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, adhere to the general principle of pursuing progress while maintaining stability, fully and faithfully apply the new development philosophy on all fronts, focus on the top task of high-quality development and strategic task of creating a new pattern of development, comprehensively deepen reform and opening up, accelerate the modernization of the industrial system, promote smooth economic flow, and make more efforts to change the growth model, improve the economic structure and gather new growth momentum, so as to effectively enhance the quality and reasonable growth of quantity in the economy. Thank you.

Shou Xiaoli:

Thank you, Mr. Fu. The floor is now open for questions. Please identify the media organization you work for before asking your questions.

_ueditor_page_break_tag_

CCTV:

Judging by the data just released, China's economy has continued to recover in the second quarter of this year. How would you evaluate the economic trends of the first half of this year? In addition, what are the characteristics of our country's economic performance? Thank you.

Fu Linghui:

Thank you for your questions. Since the beginning of this year, as the economy and society have fully resumed normal operations, policies aimed at stabilizing growth, employment, and prices have gradually taken effect. Market demand has gradually recovered, production and supply have consistently increased, and employment has remained generally stable. People's livelihoods have been effectively guaranteed, the quality of development has continued to improve, and the national economy is on a path of recovery. The characteristics are primarily as follows:

First, overall economic growth has picked up. In the first half of this year, China's gross domestic product (GDP) grew by 5.5% year on year, significantly outpacing the 3% growth rate for the entirety of last year and the 4.5% growth rate in the first quarter. Since the beginning of this year, the world has experienced a sluggish economic recovery and relatively high inflation, and contractionary monetary policies in major economies have resulted in significant spillover effects. Faced with a complex and challenging external environment, China's economic growth has been notably faster than that of the world's major developed economies, exhibiting strong resilience.

Second, domestic demand has continued to expand. Various policies and measures aimed at stimulating domestic demand have taken effect, continuously releasing its potential. Notably, consumer spending has significantly boosted economic growth. In the first half of this year, total retail sales of consumer goods grew by 8.2% year on year, maintaining a relatively rapid growth rate. The contribution of final consumption expenditure to economic growth reached 77.2%, significantly higher than that of last year. Investment has continued to grow, and investment in key areas has increased swiftly, playing an effective role in optimizing the supply structure. In the first half of this year, fixed-asset investment grew by 3.8% year on year, with infrastructure and manufacturing investments up by 7.2% and 6%, respectively.

Third, industrial development has been strengthened. Driven by a series of policies and measures to ensure stable agricultural production, increase production, and boost the real economy, the primary, secondary, and tertiary industries have continued to recover, and the foundation for development has been consolidated. Agricultural production has remained stable. A bountiful summer grain harvest has been achieved, and the market supply of vegetables, fruits, meat, poultry, eggs, and milk has generally been sufficient. In the first half of this year, the output of pork, beef, mutton, and poultry increased by 3.6% year on year. Industrial production has continued to recover. In the first half of this year, the value-added of industrial enterprises above designated size increased by 3.8% year on year, a 0.8 percentage point faster than the first quarter. The service sector has grown rapidly. In the first half of this year, the value-added of the service sector grew by 6.4% year on year, outpacing economic growth, with the growth rate of service industries featuring frequent contact or clustering of people, such as wholesale and retail, accommodation and catering, and transportation, picking up significantly.

Fourth, the economic mix has been adjusted and optimized. The industrial structure has continued to improve. In the first half of this year, the value-added of the service sector accounted for 56% of GDP and contributed 66.1% to economic growth, higher than that of the secondary industry. The value-added of the equipment manufacturing industry accounted for 32.3% of the value-added of industries above designated size, an increase of 1.4 percentage points over the same period last year. The structure of consumer spending and investment has improved. In the first half of this year, the retail sales of gold, silver, and jewelry, as well as sports and entertainment goods by enterprises above designated size, increased by 17.5% and 10.5%, respectively, and investment in high-tech industries increased by 12.5%, significantly faster than the growth of total investment.

Fifth, the driving force for innovation has continued to grow. New industries have grown and expanded. In the first half of this year, the value-added of aerospace vehicle and equipment manufacturing above designated size, as well as lithium-ion battery manufacturing above designated size, increased by 22.9% and 29.7%, respectively. The value-added of information transmission, software, and information technology services increased by 12.9%. New forms of business have continued to flourish. In the first half of this year, the online retail sales of physical goods increased by 10.8% year on year, accounting for 26.6% of the total retail sales of social consumer goods.

Sixth, employment and people's livelihoods have been ensured. With the economy recovering, the policy of stabilizing employment has continued to show effects, and the employment situation has gradually improved. In the first half of this year, the average surveyed urban unemployment rate registered at 5.3%, down a 0.2 percentage point from the first quarter, and the figure for June logged at 5.2%, indicating a downward trend since the beginning of the year. Personal income has grown rapidly. In the first half of this year, per capita disposable income rose by 5.8% in real terms, considerably faster than the growth rate for all of last year. The income gap between urban and rural residents has narrowed. In the first half of this year, the ratio of per capita disposable income between urban and rural residents decreased by 0.05 compared with the same period last year.

On the whole, our economy has shown a robust momentum of recovery and solid progress in transformation and upgrading. However, it's important to recognize the complex international political and economic situation, the sluggish global economic recovery, and, consequently, the necessity for intensified efforts to achieve sustained economic recovery. Moving forward, we will thoroughly implement the decisions and arrangements of the Central Committee of the Communist Party of China (CPC), adhering to the general principle of pursuing progress while ensuring stability. With our primary focus on high-quality development, we will implement macro policies in a systemic and targeted way, intensify efforts to expand domestic demand, comprehensively deepen reform and opening up, accelerate the cultivation and strengthening of new economic drivers, and invigorate business entities. The aim is to promote overall economic improvement, strive to realize the effective enhancement of economy's quality and achieve a reasonable growth in quantity.

_ueditor_page_break_tag_

Kyodo News:

Economic growth in the second quarter of 2023 was relatively faster than the same period last year, which was hit by COVID-19, but the international economic situation remains complex. What do you think of the economic growth prospects in the second half of this year? How will you achieve the economic target set for the whole year? Thank you.

Fu Linghui:

Thank you for your questions. In the first half of this year, the Chinese economy overall was in recovery and displayed an encouraging rebound momentum. As the economy and society have returned to normal operations, key indicators have generally improved, new growth drivers have gained strength, the quality of development has steadily risen, and the living conditions of the populace have continued to improve. All these factors have established a solid foundation for achieving the economic and social development targets set for the whole year.

Looking forward to the next stage, despite the complex and challenging external environment and pressures on domestic economic development, the economic fundamentals that will sustain long-term growth remain unaltered. The economy retains its strong resilience, substantial potential, and immense vitality, and the conditions supporting high-quality development remain robust. With the accumulation of positive factors that promote development, the economy is expected to maintain the encouraging momentum of rebound.

First, consumer spending will continue to boost economic growth. Since the beginning of this year, all sectors have actively supported the recovery and increase in consumer spending, gradually unlocking its potential. Consumer spending has played a significant role in boosting economic growth and contributing to the overall recovery. In the first half of this year, final consumption expenditure contributed to 77.2% of economic growth, significantly higher than that of last year. In the next stage, the employment situation will continue to improve further, and personal income will continue to increase, which will help increase people's purchasing power and willingness to spend. Policies aimed at stimulating spending in new energy vehicles and green smart home appliances are expected to have a positive impact on consumption and further support economic recovery.

Second, the service sector will develop better. As the economy and society have fully resumed normal operations, the growth of the service industry has gained significant momentum. Service industries involving direct interaction among people, such as wholesale and retail, accommodation and catering, and transportation, have experienced a notable rebound, substantially contributing to overall economic growth. In the first half of this year, the service sector contributed to more than 60% of economic growth. Looking ahead, there will be an increased demand for services such as cultural tourism, fitness, and sports, as well as producer services such as research and development, design, and business conventions and exhibitions. These factors will drive the service sector to maintain rapid growth and contribute to stable economic performance. The business activity index for the service sector, which registered 52.8% in June, has consistently indicated expansion for six consecutive months.

Third, new growth drivers will become stronger. China has been actively implementing the strategy of innovation-driven development and strengthening its strategic scientific and technological capabilities. Technologies such as modern information technology, artificial intelligence, and big data have been widely applied. Innovative outcomes have continued to emerge, and new industries and new products have grown at a good pace. Since the beginning of this year, significant milestones have been achieved, such as the maiden commercial flight of China's self-developed C919 large passenger aircraft and the successful installation of the world's first 16-megawatt offshore wind turbine. These advancements highlight the ongoing empowerment of high-quality development through scientific and technological innovation. Moreover, the growth of consumer spending on smart products has been expanding, driving the growth of related manufacturing. In the first half of this year, the value-added of equipment manufacturing related to smart product spending increased by 12%. At the same time, in terms of breaking through technological bottlenecks in key fields, the manufacturing sector related to semiconductor-related industries grew relatively fast, and the value-added of manufacturing special equipment for semiconductor devices increased by 30.9%. As for specific products, the output of some new materials and intelligent products has also seen robust growth, with a 23.3% increase in aerospace aluminum production and a 34.1% increase in industrial personal computer (IPC) and system production in the first half of this year. Looking ahead, innovation will provide a stronger boost and inject new impetus into economic development.

Fourth, efforts in green transformation have been significantly rewarded. With a faster pace towards green energy development, we are making progress in promoting green production and lifestyles, and achieving a harmonious coordination between green transformation and economic growth. In the first half of this year, the output of new energy vehicles, solar cells, and charging piles increased by 35%, 54.5%, and 53.1%, respectively. Moreover, there was a 61.6% increase in the export of lithium batteries, solar cells, and electric vehicles. In the upcoming phase, we expect to continue the sound progress of green development, which will contribute to transforming the driving forces of economic growth while improving the quality of economic development.

Furthermore, all localities and departments have been committed to high-quality development, implementing macro policies in a systemic and targeted way, and working hard to expand domestic demand and ensure smooth economic circulation. This endeavor will provide a strong guarantee for stable economic performance. In general, since the beginning of this year, China's economy has gradually shaken off the impact of COVID-19, returned to the track of normal operation, and shown a good recovery momentum. Throughout this year, despite pressure and challenges, our economy will steadily recover, and its development quality will continue to improve as employment improves, personal income increases, domestic demand grows, supply structure adjusts and improves, and new growth drivers become stronger. Therefore, we have the confidence, conditions, and ability to meet the economic and social development targets set for the whole year. Thank you.

_ueditor_page_break_tag_

Reuters:

Could you please tell us if economic growth in the second quarter was faster or slower than expected? What are the factors behind it? Thank you.

Fu Linghui:

Thank you for your questions. Since the start of this year, the Chinese economy has gradually returned to regular operation. It had a good start in the first quarter and continued its recovery in the second quarter. Generally speaking, the Chinese economy has shown a trend of recovery and improvement in the first half of this year. Regarding the economic performance of other countries, overall economic growth worldwide has accelerated following the adjustment of epidemic prevention and control measures. However, due to different national conditions, stages of development, and the international environment, the pace of their rapid economic growth differs significantly.

Regarding China's economic performance, since the country has fully resumed regular social and economic operations this year and production demand has gradually recovered, sectors like consumption and services, which were greatly impacted by the epidemic earlier, have accelerated their recovery and played a larger role in driving economic growth. The overall stability of agriculture and industry has provided strong support for economic recovery. In general, economic operations have gradually rebounded from the impact of the pandemic and are now back on a growth track. China's GDP grew by 5.5% year on year in the first half of this year, and by 6.3% in the second quarter. China's GDP growth rate of 5.5% is significantly faster than last year's growth rate of 3%, and also faster than the average annual growth rate of 4.5% over the past three years, indicating a notable recovery in economic growth. China's growth rate of 5.5% in the first half of the year is high in both valuation and quality.

First, China's GDP growth rate of 5.5% is faster than many other countries globally. Since the beginning of this year, worldwide economic growth has been sluggish, with major economies struggling to maintain positive growth. However, China has maintained relatively rapid economic growth, providing substantial support for global economic development. Major international organizations have recently increased their expectations for global economic growth. One of the key reasons behind this is that China has maintained its economic recovery. According to statistics released by major economies, in the first quarter of this year, GDP in the United States, the eurozone, Japan, and Brazil grew by 1.8%, 1%, 1.9%, and 4%, respectively. Even considering the situation in the second quarter, China's economic growth rate in the first half of the year remains the fastest among major economies.

Second, China's GDP growth rate of 5.5% results from structural improvement and optimized driving forces. In terms of demand, the economic growth, which was primarily driven by investment and exports last year, is now fueled by consumption and investment. In particular, consumption has played a significantly larger role in driving the economy. In the first half of 2023, final consumption expenditure contributed to over 70% of China's GDP growth. Regarding production, while the economy depended mainly on the industrial sector last year, it is now powered by a combination of the service sector and industry, with the share of the service sector growing considerably. In the first half of this year, the service sector contributed to over 60% of China's economic expansion.

Third, China's 5.5% growth was propelled by innovation and a shift in its development mode. As the innovation-driven development strategy was further implemented, new growth drivers continuously emerged, lending strong support to high-quality development. In the first half of this year, investment in high-tech industries rose 12.5% year on year, the added value of information transmission, software, and information technology services increased 12.9%, and online retail sales of physical goods grew 10.8%. Meanwhile, China's efforts toward green transformation have yielded significant results, considerably bolstering economic growth.

Judging from the environmental quality data in the first half of the year, the percentage of days with good air quality remains at a relatively high level. Among the national surface water sections monitored by the state, the proportion of sections with excellent and good water quality increased by 2.1% year-on-year. In the first half of the year, the output of new energy vehicles and solar cell products increased by 35% and 54.5%, respectively. Energy efficiency also continued to improve, with energy consumption per unit of GDP decreasing by 0.4% year on year in the same period.

Fourth, China's 5.5% growth stems from a high level of opening up and improved trade structure. Despite a sluggish global economic recovery and a slowdown in global trade and investment, China has actively enhanced its high-level opening up and fostered an upgrade in its trade structure. The nation has also strengthened economic and trade exchanges with other countries worldwide, grounded in principles of mutual benefit and win-win cooperation, leading to further progress. In the first half of the year, China's total goods imports and exports rose by 2.1% year on year, in which the proportion of general trade, carrying higher added value, in the total import and export value increased to 65.5%. The development of trade has diversified. China's trade in goods with nations along the Belt and Road Initiative in the first half of 2023 grew by 9.8% year on year, and the total imports and exports to Latin America and Africa increased by 7% and 10.5%, respectively. Cross-border e-commerce and other new foreign trade business models are rapidly evolving.

Fifth, China's 5.5% growth is driven by expanding employment and improvements in people's livelihoods. So far this year, China's urban surveyed unemployment rate decreased to 5.2% in June, mirroring the pre-pandemic level. Rising employment has resulted in higher resident income. In the first half of the year, China's per capita disposable income of both urban and rural residents grew by 5.8%, markedly faster than last year. The economic recovery has incited a higher propensity among consumers to spend, subsequently leading to an increase in consumer spending. In the first half of the year, China's per capita consumption expenditure rose by 7.6%.

Sixth, China's 5.5% growth is characterized by consolidated food and energy security. Since the start of this year, all parties have dutifully contributed to grain production. Even in the face of heavy rain during the harvest period, a plentiful harvest was secured, with the grain output achieving the second-highest in history. This laid a solid foundation for "Chinese people to hold their rice bowls firmly in their own hands." Greater efforts have been exerted to ensure energy supply. In the first half of the year, primary energy production grew by 2.7% year on year, with the output of raw coal, crude oil, and natural gas increasing by 4.4%, 2.1% and 5.4%, respectively. This effectively ensured the energy supply for production and daily life. Thank you.

_ueditor_page_break_tag_

Cover News:

Statistics show that China's CPI came in flat in June compared with the same period last year, and the producer price index (PPI) fell by 5.4% year on year. Does this mean that deflation is coming? What's your assessment of the price issue at present? Thank you.

Fu Linghui:

Many people have paid considerable attention to the price issue, and there is a lot of discussion about deflation. As I have said at previous press conferences, generally speaking, deflation is not currently apparent in China and is not expected to emerge in the next stage. Even though prices are temporarily operating at a low level, in terms of economic growth and money supply indicators, China's economy is not currently in a state of deflation as it does not meet the necessary conditions.

Examining price itself, in the first half of the year, the sluggish global economic recovery and falling international energy prices led to a drop in domestic energy prices. Additionally, domestic car manufacturers have lowered their prices to increase sales, and pork prices have decreased. Coupled with the high base from the same period last year, the growth of China's CPI slowed down in the first half of the year. China's CPI increased by 0.7% year on year, a 0.6 percentage point lower than the previous quarter. The main characteristics are as follows. First, the growth of food prices declined. In the first half of the year, food prices rose by 2.5% year on year, 1.2 percentage points lower than the first quarter of the year. Among them, the prices of fresh fruits and poultry rose rapidly, up 7.9% and 6.4%, respectively. Due to sufficient hog production capacity, pork prices dropped in May compared to last year, with an average increase of 3.2% in the first half of the year. Second, energy prices fell. Due to a drop in international energy prices, China's energy prices fell by 3.5% in the first half of the year, with gasoline and diesel prices falling by 7.3% and 8%, respectively. Third, service prices rose slightly. Driven by the recovery of service consumption, the growth of service prices has expanded. In the first half of the year, service prices rose by 0.9% year on year, a 0.1 percentage point higher than the first quarter of the year, with prices for flight tickets, hotel accommodation, and tourism rising by 20.2%, 8.6%, and 7.1%, respectively. Fourth, the core CPI increased steadily. In the first half of the year, the core CPI, excluding food and energy, rose by 0.7% year on year, a 0.1 percentage point lower than the first quarter.

China's CPI remained flat in June compared to the same period last year, transitioning from a 0.2% increase in the previous month to year-on-year stability, which has also drawn widespread attention. Generally speaking, a modest increase in CPI is due to a combination of international and domestic factors and is temporary. Since this year, China has fully resumed normal socio-economic activities, market demand has gradually expanded, and production supply has continued to increase. The Chinese economy has demonstrated an encouraging momentum of recovery. In terms of supply, during the epidemic, China intensified efforts to alleviate difficulties for enterprises, thereby preserving the survival of many businesses. Post-epidemic, with its complete industrial system and robust production capacity, China swiftly augmented market supply and improved employment, showing an impressive recovery in production supply. Regarding demand, impacted by the epidemic over the past three years, residents' income and corporate revenue were both affected to some extent. The recovery of corresponding market demand takes some time. The asynchronous recovery between supply and demand has led to a low level of CPI at present to a certain extent.

Imported pressures and the high base from the same period last year have also led to a temporary drop in CPI growth. Looking forward, with the recovery of China's economy, growing market demand, and smooth economic circulation, the supply-demand relationship will gradually ease. Regarding food prices, China's grain output is generally stable, which helps stabilize food prices. The seasonal increase in pork consumption demand will also spur prices to rise. Concerning manufactured goods prices, the influence of international energy prices may persist, but the impact of short-term price reductions and promotions by car manufacturers is expected to fade. In terms of service prices, as demand for services steadily expands, service prices will maintain a stable increase. In the second quarter of the year, service prices rose by 0.9% year on year, a 0.1 percentage point higher than the first quarter. Given the above factors, and as the high base factor from the same period last year gradually diminishes, price increases will progressively return to a reasonable level. Thank you.

_ueditor_page_break_tag_

Market News International:

The growth rate of real estate development investment declined recently. With the continuous relaxation of real estate policies, what is the trend of real estate investment in the second half of the year?

Fu Linghui:

Thank you for your question. The real estate market is an area that people are concerned about. Since the beginning of this year, all localities and government departments have followed the principle that houses are for living in, not for speculation, and implemented city-specific policies to support the rigid and upgraded demand for housing. We have actively worked to ensure the delivery of presold housing, people's livelihoods and stability. The backlog of demand for house purchases in the first quarter was released, which led to an improvement in the real estate market. In the second quarter, the real estate market gradually returned to normal operation. In the first half of the year, the overall real estate market showed a trend of stabilization. The major indicators such as real estate market sales, development investment, and in-place funds for real estate development enterprises have all improved compared to last year. In the first half of the year, the country's commercial housing sales decreased 5.3% year on year in terms of floor area, and grew 1.1% in terms of value, both significantly better than the whole of last year. The decline in sales area was significantly smaller, and the sales revenue turned from a decrease to an increase. In the first half of the year, real estate development investment decreased 7.9% year on year, and the in-place funds of real estate development enterprises fell 9.8% compared to last year, with the decline narrowing to varying degrees compared with the whole of last year.

The trend shows that as the economy sees an overall recovery and the policies for the healthy development of the real estate market take effect, this sector will gradually stabilize. On the demand side, thanks to the policy that houses are for living in, not for speculation, speculative demand for housing has been gradually repressed, while inelastic demand and demand for upgraded housing have been released in an orderly manner, which will continue to drive the development of the real estate sector. On the supply side, the business models of some real estate companies based on high leverage, high debt and high turnover are unsustainable, and supply in the real estate market is undergoing temporary adjustments. As the adjustments gradually take effect, market supply will also gradually tend toward stability. From a medium to long-term perspective, China's real estate market is transitioning from rapid development in the past to stable development, which is determined by changes in the development stages of the real estate market and adjustments to market supply and demand.

In the next stage, we must adhere to the principle that houses are for living in, not for speculation. We need to accelerate the establishment of a housing system with multiple types of suppliers and support channels that encourages both renting and buying. We will implement a long-term mechanism to promote the stable and healthy development of the real estate market, continue to support the rigid and upgraded demand for housing, regulate the development of the housing rental market, promote stability in the real estate market, and ensure people's livelihood needs are met.

Regarding your concerns about real estate investment, currently, the sector still sees a decline in the gross floor area of new projects and an increase in completed real estate space, resulting in an overall decrease in construction area. Going forward, real estate investment is expected to remain at a low level. However, as the real estate market gradually adjusts, we anticipate that real estate investment will gradually return to a reasonable level. Thank you.

_ueditor_page_break_tag_

CMG Voice of China:

In the first half of the year, the service sector including accommodation and catering achieved rapid growth. What are the reasons for this? How do you view the development trends of the service sector going forward? Thank you.

Fu Linghui:

Thank you for your questions. The service sector was an outstanding highlight of economic growth in the first half of the year. Since the beginning of this year, China has fully resumed normal order in its social and economic activities. With the effective implementation of policies to stabilize growth, employment and prices, the recovery of its service sector has gathered pace significantly. The modern service industry has seen overall sound development, with new growth drivers developing rapidly, and the expectations of service enterprises have been generally stable. In the first half of the year, the added value of the service sector increased 6.4% year on year, which was significantly higher than the same period last year as well as the whole of last year.

First, the contact-based service industry grew rapidly. With an increase in residents going out to shop, dine and travel, related service industries have accelerated recovery. In the first half of the year, the added value of the accommodation and catering industry, wholesale and retail industry, transportation, warehousing and postal industry increased 15.5%, 6.6% and 6.9% year on year, respectively, all maintaining a rapid growth.

Second, the modern service industry has shown a robust growth trend. Digital development continues to deepen, and the demand for information services is expanding, driving growth in related industries. In the first half of the year, the added value of the information transmission, software and information technology services industry increased 12.9% year on year. Business activities have accelerated recovery, and the demand for services such as exhibitions and tourism has increased, leading to fast growth in related service industries. In the first half of the year, the added value of the leasing and business services industry increased 10.1% year on year.

Third, the new drivers for the development of the service sector have been strengthened. With technological innovation driving growth, the high-tech service industry has seen rapid development. During the January-May period, the revenues of the technology service industry and high-tech service industry increased 12.4% and 11.9% year on year, respectively. In the first half of the year, fixed-asset investment in the high-tech service industry increased 13.9% year on year.

Fourth, the expectations of service enterprises have been generally stable. In June, the Services Business Activity Index stood at 52.8, which has remained in the expansion range for six consecutive months. As for market expectations, the expected index of business activities in the sector was 60.3, 0.2 percentage point higher than the previous month, indicating that service enterprises are optimistic about market prospects.

The service sector has recovered rapidly for several reasons. First, the country has fully resumed normal order in its social and economic activities, creating favorable conditions for the development of the service sector, especially for contact-based services and services involving social gathering. Second, economic activities such as the flow of people and logistics have become more active, significantly driving the growth of related service industries. This year, there has been a significant increase in the tourism and travel activities of residents, and the box offices of cultural performances and films have expanded rapidly. Third, the service sector has seen remarkable innovative progress, with new business forms and models developing rapidly. Technological innovation has significantly driven the growth of the high-tech service industry such as research and development, and the integration of online and offline business activities has accelerated. New service models such as online retail and livestreaming have grown rapidly, injecting new impetus into the development of the service sector. Overall, the service sector has been on track for a sound recovery, which is favorable for boosting production, improving people's livelihoods, expanding employment, and promoting stable economic growth. In the next stage, as domestic demand potential is gradually released and market confidence strengthens, the service sector will continue its good momentum of steady growth. Thank you.

_ueditor_page_break_tag_

Red Star News:

How was the employment situation in the first half of the year? Will it be possible to achieve the annual target for new jobs? As it is currently graduation season, have there been improvements in the employment prospects for young people? Thank you.

Fu Linghui:

Thank you for your questions. Employment is a matter of concern to many people. This year, driven by the overall improvement of the Chinese economy, the job market has been generally improved. Specifically, as the economy sustains sound recovery and the policies for stable employment continue to take effect, the labor market is becoming more active and the overall employment situation is improving.

First, the scale of employment steadily expanded. In the first half of the year, 6.78 million new jobs were created in urban areas nationwide, an increase of 240,000 year on year. The labor force participation rate of the urban population aged 16 and above has steadily increased. In June, the number of employed people in urban areas increased significantly compared with the same period of the previous year. Among them, the number of people employed in industries such as wholesale and retail, accommodation and catering, and transportation increased significantly.

Second, the surveyed urban unemployment rate decreased. In the second quarter, the average surveyed urban unemployment rate was 5.2%, down 0.3 percentage point from the first quarter. In June, the surveyed urban unemployment rate was 5.2%, 0.3 percentage point lower than the same period last year. The unemployment rate for the main employment groups was at a relatively low level. In June, the unemployment rate for the urban labor force aged 25-59 was 4.1%, which is already lower than the level before COVID-19, and the basic employment situation remained stable.

Third, the overall employment situation for migrant workers improved. In June, the unemployment rate for migrant workers with agricultural household registration was 4.9%, which is at a relatively low level since the beginning of this year. We also saw that at the end of the second quarter, there were 187.05 million rural laborers working outside their hometowns, up 3.2% year on year. This indicates that with the economic recovery, the country's workforce has shown a greater willingness to enter the labor market and land jobs.

The main reasons for the overall improvement in employment are as follows. First, the economy is recovering. In the first half of the year, China's GDP increased 5.5% year on year, a significantly faster growth rate than last year. The expansion of the economy inevitably leads to an increase in market demand, which in turn leads to an increase in labor demand from enterprises and an overall improvement in employment. Second, the service sector is growing rapidly. As mentioned earlier, the service sector involves a variety of industries, hence providing a wide range of employment opportunities. Since the beginning of this year, contact-based service industries such as transportation, accommodation, catering and tourism have shown good recovery momentum, which has significantly boosted employment. Third, the policies for stable employment have taken effect. Since the beginning of this year, the CPC Central Committee has attached great importance to employment, and all localities and government departments have implemented the employment-first policy in a detailed and effective manner. We have implemented various measures to stabilize existing employment, expand job opportunities, improve the quality of employment, and ensure basic employment needs. We have provided stronger support for enterprises to stabilize employment, improved public employment services and enhanced vocational training. All these efforts have created favorable conditions for maintaining stable employment. In addition, as the country has fully resumed normal order in its social and economic activities, offline recruitment and job hunting are becoming more convenient, which is conducive to matching the employment supply and demand, and driving employment growth.

However, we must notice the pressure brought by a huge workforce and related structural issues, as well as the dual problems of young people facing difficulties finding a job and some industries facing difficulties hiring qualified workers. Therefore, we should continue intensifying our efforts to stabilize employment. Young people's employment is important not only to the growth and accomplishment of young people themselves, but also to the development and future of our country. The CPC Central Committee has attached great importance to youth employment, emphasizing that we must give greater priority to boosting employment and business startups of young people, especially college graduates. The executive meetings of the State Council have made important decisions and requirements for ensuring employment; relevant government departments have introduced a series of policies to promote the employment of college graduates and other young people; all localities are taking swift action to ensure that the relevant policies are implemented to the fullest extent and down to the last detail. In the next stage, the employment is expected to remain generally stable due to the continuous economic recovery, the growing labor demand and the effective policies to stabilize employment. As young graduates gradually enter the workforce during the graduation season, the youth unemployment rate is expected to gradually decline. Thank you.

_ueditor_page_break_tag_

CNBC:

I have three questions. First, is the youth unemployment rate expected to fall next month? Second, the decline in real estate investment has expanded. How will it affect the growth of the real estate industry? Third, what is the sales volume of e-commerce live streaming in the first half of this year, and what is the year-on-year growth, and how much it accounts for in retail consumption? Thank you.

Fu Linghui:

Thank you for your question. With regard to the youth unemployment rate, from a seasonal and historical perspective, the youth unemployment rate will rise during the graduation season as college graduates gradually enter the labor market. Judging from this year's situation, in June, the youth unemployment rate was 21.3%, an overall increase compared with the previous month. Due to the mass influx of young graduates and young people entering the labor market we're likely to see next month, there may be an increase. Generally, as the graduation season passes, young people will gradually find employment. From a historical perspective, after August, the number will gradually decline. This is about youth employment.

The second question is about real estate. As I mentioned in the first question, in general, although the real estate market is still in the adjustment stage this year, the real estate market is gradually showing a stable trend compared with last year. In terms of investment, sales, and corporate funds, they have all improved to different degrees compared with last year. In the next stage, as the real estate market is gradually adjusted in place, the real estate market will gradually stabilize, and real estate investment will gradually return to a reasonable growth level.

The third question is about e-commerce livestreaming sales. I don't have the relevant information yet. You can contact the Information Office of the NBS after the conference to obtain relevant information. Thank you.

Nanfang Daily:

How do you view the performance of the domestic consumer market in the first half of the year, and how does consumption play a role in driving the economy? What is the expected trend in the next stage? Thank you.

Fu Linghui:

Thank you for your question. Consumption is also a matter of great interest to everyone. In the first half of the year, domestic consumption recovery was gaining steam. Since the beginning of this year, as the economy and society have fully returned to normal, economic recovery has improved, consumption scenarios have expanded, consumption promotion policies have taken effect, residents' consumption has steadily expanded, and market sales growth has accelerated. In the first half of the year, the total retail sales of social consumer goods exceeded 20 trillion yuan, reaching 22.8 trillion yuan, a year-on-year increase of 8.2%, growing much faster than last year. From the perspective of per capita consumption expenditure of residents, the national per capita consumption expenditure in the first half of the year saw a nominal year-on-year growth of 8.4%, 5.9 percentage points faster than the same period of the previous year. It mainly has the following features.

First, service consumption grew rapidly, and travel and contact consumption grew relatively well. With the recovery of various service consumption scenarios, residents' service consumption expenditures have increased, and catering, transportation, and tourism consumption have grown rapidly. In the first half of the year, the national residents' per capita service consumption expenditure increased by 12.7% year on year, which was significantly faster than the growth rate of all consumption expenditures, among which, transportation expenditure increased by 12.9%. In the first half of the year, the national catering revenue increased by 21.4% year on year and the operating passenger traffic increased by 56.3% year on year. During the Dragon Boat Festival this year, the number of domestic tourists and tourism revenue increased by 32.3% and 44.5%, respectively.

Second, the sales of commodities grew steadily, and the sales of upgraded goods grew rapidly. While service consumption is recovering rapidly, commodity consumption is expanding steadily, with sales of commodities that meet the developmental needs of residents growing remarkably. In the first half of the year, retail sales of goods increased by 6.8% year on year, and 80% of retail sales of enterprises above designated size maintained growth. Among them, the retail sales of upgraded commodities, such as gold-silver jewelry, sports and entertainment products, increased by 17.5% and 10.5% year on year, respectively. Consumption of bulk commodities, such as automobiles, continued to grow. In the first half of the year, the retail sales of automobiles above designated size increased by 6.8% year on year.

The third is the growth of new drivers of consumption and the expansion of green consumption and digital consumption. With the change in residents' consumption concept, the policy of promoting consumption upgrading has delivered, and consumption has continued to gather new momentum. Sales of green smart products grew rapidly. In the first half of the year, sales of new energy passenger vehicles exceeded 3 million, a year-on-year increase of 37.3%. Retail sales of low-energy household appliances and audio-visual equipment for units above the designated size increased by more than 20% year on year. Big data monitoring shows that during the 6.18 shopping festival, the turnover of smart home appliances and audio-visual equipment grew much faster. With the promotion of new business models such as live streaming sales and instant retail, online retail sales have grown rapidly. In the first half of the year, online retail sales of physical goods increased by 10.8% year on year.

Fourth, the potential in cultural and entertainment consumption has been released, and the rural market is picking up. With the orderly recovery of offline consumption scenarios, sports events, concerts, theater performances, and other recreational and sports activities have increased, driving the expansion of consumption. In the first half of the year, national per capita cultural and entertainment expenditure of residents increased by 38.5% year on year in nominal terms. The national box office increased by 52.9% year on year, and attendance increased by 51.8%. At the same time, rural revitalization is advancing steadily, and the rural consumer market remains active. In the first half of the year, the retail sales of consumer goods in rural areas increased by 8.4% year on year, faster than that in urban areas, and the retail sales of cosmetics and gold-silver jewelry in units above designated size in rural areas also grew faster than urban areas. The development of rural e-commerce is accelerating. Big data monitoring shows that the growth rate of online retail sales in rural areas during the 618 (June 18) shopping festival was faster than that of all online retail sales.

In general, the consumption potential was gradually released in the first half of the year, and the recovery of consumption showed positive results, which promoted economic development and improvement of people's livelihood. From the perspective of the whole year, there are many favorable conditions to support the growth of consumption, and consumption is expected to continue to expand. One is the huge consumption potential. At present, China is experiencing a rapid upgrade in its consumption structure. With the steady advancement of urbanization, effective implementation of rural revitalization, and continuous improvement in consumption-related infrastructure, all these factors are conducive to the release of consumption potential. The second is the gradual increase in consumption capacity. Since the beginning of this year, the economic recovery and the employment situation have improved, and residents' income has continued to increase, which is conducive to enhancing residents' consumption capacity and willingness to consume. Third, the consumption environment continued to improve. The economy and society have fully returned to normal. Consumption scenarios have continued to expand, and new ones have continued to emerge, bringing vitality to the recovery of consumption. At the same time, various regions and departments are actively promulgating and implementing policies to promote consumption and maintain a good consumption order, which is conducive to enhancing consumer confidence. It should also be noted that the new consumption growth points represented by green consumption and smart product consumption are gradually forming, which will help promote positive developments in consumption.

In the next stage, to further release the consumption potential, we must do everything possible to increase the income of urban and rural residents, continue to implement consumption promotion policies, optimize the consumption environment, increase the supply of high-quality consumption products, cultivate and expand emerging consumption, and promote stable, sustainable, and healthy economic development. Thank you.

_ueditor_page_break_tag_

Global Times:

Since the beginning of this year, the growth rate of investment has continued to slow down. What is the main reason behind this? What do you think of the investment data in the first half of the year? And what is the outlook for future investment growth? Thank you.

Fu Linghui:

Thank you for your question. Investment is an important field for expanding domestic demand. Since the beginning of this year, due to the adjustments to the real estate market, the growth rate of fixed asset investment has slowed down, but all regions and departments have implemented the plans and arrangements of the Party Central Committee to actively expand effective investment, optimize the investment structure, promote major infrastructure construction, support enterprises to increase investment in innovation, and maintain sustainable growth of fixed asset investment. In the first half of the year, the fixed asset investment increased by 3.8% year on year, the investment structure continued to be optimized, and investment in key areas continued to strengthen.

First, infrastructure investment grew rapidly. Concerted efforts have been made to promote major infrastructure construction, such as transportation and water conservancy, and the results became more evident. In the first half of the year, infrastructure investment increased by 7.2% year on year, of which investment in railway transportation and water conservancy management increased by 20.5% and 9.6%, respectively. The construction of new infrastructure moved forward steadily, laying a good foundation for long-term economic and social development. In the first half of the year, investment in new infrastructure construction increased by 16.2% year on year, of which investment in new information infrastructure such as 5G and data centers increased by 13.1%, and investment in new integrated infrastructure such as industrial internet and smart transportation increased by 34.1%.

Second, manufacturing investment continued to grow. The manufacturing industry is showing strong momentum in upgrading and development, and investment in capital and technology-intensive industries is growing rather rapidly. In the first half of the year, manufacturing investment increased by 6% year on year, of which investment in equipment manufacturing increased by 14.4%, playing a significant role in supporting the growth of investment in manufacturing. The pace of green transformation of the manufacturing industry has accelerated, and investment in new energy vehicles, lithium battery manufacturing and other industries has maintained rapid growth. In the first half of the year, investment in automobile manufacturing and electrical machinery and equipment manufacturing increased by 20% and 38.9%, respectively, year on year.

Third, the innovation investment demonstrated good growth momentum. Investment in innovation represented by high-tech industries and technical services, continued to increase, and its role in supporting investment growth was enhanced. In the first half of the year, investment in high-tech industries increased by 12.5% year on year, significantly faster than the growth of total investment. Enterprises' growing demand for technical services drives the continuous increase of investment in related industries. In the first half of the year, investment in professional technology and technological achievements transformation increased by 51.6% and 46.3% year on year, respectively.

Fourth, investment in emerging fields expanded. As the digital transformation of the economy continues to deepen, related investments have maintained rapid growth. In the first half of the year, investment in electronics and communication equipment manufacturing and e-commerce services increased by 14.2% and 22.2%, respectively. The green transformation of energy has accelerated, and investment in clean power has increased. In the first half of the year, investment in clean power increased by 40.5% year on year, of which investment in solar and wind increased by 84.4% and 16%, respectively.

All these show that although investment growth has slowed this year due to multiple factors, the investment structure has continued to be optimized, and its support for future development has gradually increased. In the next stage, we will continue to give full play to the role of government investment and policy incentives and guidance, effectively stimulate private investment, continue to optimize the investment structure, and improve investment efficiency to promote high-quality economic development. Thank you.

_ueditor_page_break_tag_

China Financial and Economic News:

China will launch the fifth national economic census this year. Could you please provide an update on the current progress of the census? Thank you.

Fu Linghui:

Thank you for your question and your interest in the economic census. The fifth national economic census is a significant survey of our country's economic situation and strength as China embarks on a new journey of comprehensively building a modern socialist country. On July 7, the State Council held the first plenary meeting of the Leading Group for the Fifth National Economic Census, along with a nationwide teleconference. During these meetings, new plans for implementing and deploying the economic census work were discussed, resulting in further comprehensive mobilization. All regions and relevant departments have diligently adhered to the guiding principles of these meetings, working closely together to advance all aspects of the fifth national economic census.

In the next stage, the focus of the economic census work will be on conducting the inventory survey for various units. This survey aims to gather information on the basic situation and distribution of various legal entities engaged in economic and social activities within China, including industrial activity units, as well as self-employed individuals engaged in secondary and tertiary industry activities. The main object is to accurately identify and categorize the subjects for the fifth national economic census, clarify the registration responsibilities of local census agencies and relevant departments, ensure precise definition and coverage of the types of subjects to be surveyed, and avoid duplication or omission of units for the census. These efforts will lay the foundation for subsequent economic census activities.

The unit inventory survey is an essential foundational task that ensures the smooth implementation of census registration. Based on the results of the unit survey, the census unit list and the sample list of self-employed individuals can be compiled. This aids in clarifying the types of census forms to be filled out by census subjects. The quality of the survey work is directly related to the success of the census initiative.

The subjects of the unit inventory survey encompass all legal entities engaged in economic and social activities within China, including industrial activity units and self-employed individuals involved in the secondary and tertiary industries. The primary method involves county-level census agencies organizing census enumerators to conduct "door-to-door" surveys using handheld electronic devices, collecting information, and filling out census forms based on different categories. The survey work primarily includes selecting and training census enumerators, dividing census areas, compiling of census registers, conducting "door-to-door" surveys and verifying data. These activities will take place from June to December of this year, with a specific emphasis on the "door-to-door" survey primarily conducted from August to October. During this period, census personnel wearing Census Enumerator Certificates and Census Supervisor Certificates will come to collect information for the census forms.

I would like to take this opportunity to request the full cooperation of all survey subjects in supporting the door-to-door survey work. Please prepare relevant certificates and documents in advance and provide timely and accurate information, which will be used solely for the census purposes. All levels of census agencies and personnel are committed to maintaining the confidentiality of the provided information. Let's work together to complete the unit survey successfully. I would like to extend our heartfelt gratitude for everyone's immense support towards the economic census work. Thank you.

National Business Daily:

Despite the risk of shrinking external demand, China's foreign trade volume in the first half of this year reached a record high of 20.1 trillion yuan. Could you please analyze the reasons behind this? Also, how does the NBS foresee the trend of foreign trade for the second half of the year? Thank you.

Fu Linghui:

Thank you for your questions. Foreign trade is something that everyone is paying close attention to as well. Since the beginning of this year, the global economic recovery has been weak, and major economies have tightened monetary policies to curb high inflation, which has aggravated the contraction in global demand. The global manufacturing PMI's new export orders index has consistently remained in the contraction zone, and sluggish global trade has inevitably affected China's import and export growth. However, China's foreign trade operation remains robust and dynamic despite these pressures. Thanks to various measures to stabilize foreign trade, China's import and export volume exceeded 20 trillion yuan in the first half of the year. The total value of goods imports and exports reached 20.1 trillion yuan, setting a new historical record for the same period and showing a year-on-year growth of 2.1%. Exports grew by 3.7%, and China's share in global exports remained relatively stable. In the next stage, despite continuous pressure from shrinking external demand, China's foreign trade is expected to withstand the challenges and progress toward the goal of stability and quality improvement.

First, China's production and supply capabilities are relatively robust. China has a comprehensive industrial system with well-developed supporting industries, strong organizational capabilities, and a resilient supply chain. This provides a solid foundation for foreign trade development. Looking at the situation in the first half of the year, China's traditional export products continued to grow. In the first half of the year, China's exports of mechanical and electrical products increased by 6.3% year on year.

Second, the results of high-level opening-up are continuously manifesting. China remains steadfast in opening wider to the outside world, expanding economic and trade exchanges with countries around the world based on mutual benefit and win-win cooperation. This includes advancing Belt and Road cooperation, promoting the development of free trade zones, and expanding the growth space for foreign trade. In the first half of the year, China's imports and exports with countries along the Belt and Road increased by 9.8%. Additionally, exports and imports with Africa and Latin America grew by 10.5% and 7%, respectively.

Third, new drivers for foreign trade growth are gradually emerging. As China's industrial upgrading continues, the steady improvement of market competitiveness for new products has become a new highlight driving foreign trade growth. In the first half of the year, exports of "three new major export products," namely electric passenger cars, lithium batteries, and solar cells, increased by 61.6% year on year. Simultaneously, new forms of foreign trade, such as cross-border e-commerce, are developing rapidly, creating favorable conditions for improving the quality and expanding the scale of foreign trade.

It's also worth noting that various localities and departments have taken proactive measures to ensure stable and well-structured foreign trade. These measures have helped foreign trade entities actively cope with the contraction of external demand, seize market opportunities, and stabilize import and export trade. In the first half of the year, imports and exports by private enterprises grew by 8.9% year on year, playing a positive role in stabilizing foreign trade.

Overall, while foreign trade is experiencing growth pressures, there are also many favorable conditions. Going forward, we need to effectively implement various policies to stabilize foreign trade and strive to achieve our goal of promoting stability and improving the quality of foreign trade. Thank you.

_ueditor_page_break_tag_

Bloomberg:

My question is about wages. So, wage growth is about 5.8%, I think, which is slightly faster than GDP but is still not back to the pre-pandemic levels of above 8% expansion. How will that affect the sustainability of any consumption recovery? And how do you expect that consumption will grow faster than GDP when wages are basically only growing as fast as GDP? Thank you.

Fu Linghui:

Thank you for your questions. The wage growth you mentioned likely refers to the real increase in residents' income. In the first half of the year, the nationwide per capita disposable income of residents saw real growth of 5.8% and nominal growth of 6.5% year on year, maintaining a relatively rapid growth rate. About the pre-pandemic levels of 8% expansion that you mentioned, I believe that was nominal rather than real growth. As for the situation this year, China's economy has shaken off the impact of the pandemic, demonstrating a momentum of recovery, and is gradually picking up. Residents have witnessed expanding employment channels and steadily increasing incomes. In the first half of the year, per capita disposable income of residents grew 5.8% year on year, 2 percentage points faster than that of the first quarter. This is the real growth rate, taking into account price factors, which indicates a steady rise in residents' incomes and its positive role in boosting consumption. As production, allocation, circulation, consumption, and other aspects of economic activity gradually improve, income growth will further stimulate and support consumption.

Overall, final consumption expenditure accounted for 77.2% of economic growth in the first half of the year, and it is expected to continue to be a driving force in the upcoming period. China's consumption structure is undergoing rapid evolution and development. The increase in incomes and the enhancement of the consumption environment are conducive to the sustained expansion of consumption, and they will play an increasingly critical role in facilitating the transition toward high-quality economic growth. Thank you.

Shou Xiaoli:

We will have one last question.

ThePaper.cn:

In the first half of this year, the profits of China's industrial enterprises above designated size continued to fall by double digits. When can these enterprises bear less pressure? What does the NBS expect the trend to be in the year's second half? Thank you.

Fu Linghui:

Thank you for your questions. Since the beginning of this year, the overall performance of the industrial sector has seen a stable recovery. The progress of the industrial sector and corporate performance are intimately connected. As market demand gradually recovered during the first half of the year, and the measures put in place to strengthen and improve the real economy as well as promote industrial transformation and upgrading took effect, overall industrial production maintained stable growth. Moreover, the structure was optimized, the new growth momentum was steadily gathered, and the development quality improved steadily.

First, industrial production has experienced a gradual recovery. The total value added by industrial enterprises above designated size grew by 3.8% year on year in the first half of the year, which is 0.8 percentage point faster than in the first quarter. Among the 41 major industrial sectors, 26 maintained growth in the year's first half, accounting for 63.4% of the total. 331 out of 620 major industrial products saw production growth. In other words, more than 50% of them achieved growth.

Second, steady progress has been made in industrial upgrading. The technological intensity of industrial production continues to improve. In the first half of the year, the value added by equipment manufacturing increased by 6.5% year on year, 2.7 percentage points faster than that of industrial enterprises above designated size. It contributed to 53.9% of the growth of all industrial enterprises above designated size and effectively supported the recovery of industrial production. Specifically, the value added of electrical machinery and equipment manufacturing saw a year-on-year increase of 15.7%, and that of auto manufacturing grew by 13.1% year on year.

Third, advanced manufacturing has experienced relatively rapid growth. With the growth momentum of the aviation and aerospace sectors, and the commercial operation of China's self-developed large passenger aircraft, the enabling role of advanced manufacturing has become increasingly prominent. In the first half of the year, the value added by aircraft, spacecraft, and equipment manufacturing saw a year-on-year increase of 22.9%. All sectors have strengthened efforts to make breakthroughs in key fields and links concerning semiconductors, and related production has grown rapidly. In the first half of the year, the manufacturing of special equipment for semiconductor devices and electronic and electromechanical components increased by 30.9% and 46.5% year on year, respectively.

Fourth, the green transformation of industries has witnessed notable improvement. The new energy vehicle (NEV) sector has shown sound momentum and helped drive the growth of related products. In the first half of the year, NEV output increased by 35% year on year, and that of lithium-ion batteries and charging piles surged 46.4% and 53.1% year on year, respectively. Products related to clean energy also saw rapid growth. In the first half of the year, the output of photovoltaic cells, wind turbines, and hydroelectric generators increased by 54.5%, 48.1%, and 32.3% year on year, respectively.

Fifth, the production of intelligent products and new materials has picked up. Intelligent consumer goods have experienced rapid production growth. In the first half of the year, the manufacturing of smart consumer equipment increased by 12%. Specifically, the manufacturing of intelligent vehicle equipment and unmanned aerial vehicles grew by 36.3% and 12.5%, respectively. The supply of new materials also increased. In the first half of the year, the output of ultra-clear glass, polysilicon, and monocrystalline silicon for the solar energy industry increased by 89.1%, 86.4%, and 54.1%, respectively.

Regarding the profits of industrial enterprises mentioned in your question, we believe that the sustained recovery of industrial production has laid a solid foundation for improving enterprise profits. From January to May, the decline in profits of industrial enterprises above designated size narrowed by 1.8 percentage points compared to that from January to April. This trend constitutes an improvement for three consecutive months. First, the profits of equipment manufacturing and other manufacturing sectors continued to recover. During the January-May period, various policy measures designed to bolster manufacturing took effect. The decline in profits in the manufacturing sector narrowed by 3.3 percentage points compared to that in the first four months. This reduction resulted in a decline in the profit decrease of industrial enterprises above designated size by 2.5 percentage points, which played a significant role in improving the profits of industrial enterprises. Among them, the profits of equipment manufacturing in May saw a year-on-year increase of 15.2%, maintaining double-digit growth for two consecutive months. Second, profits in the electricity, gas, and water-related sectors grew rapidly. From January to May, profits from the production and supply of electricity, heat, gas, and water increased by 34.8% year on year, 0.7 percentage point faster than during the January-April period. This growth has continuously driven the profit increase of industrial enterprises.

Although industrial production is currently recovering steadily and the quality of development continues to improve, the level of connection between industrial production and sales still needs to be enhanced. Despite anticipated challenges, China is expected to see an increasingly solid foundation for the recovery of the industrial economy and experience continuous improvements in the profitability of industrial enterprises. This positive outlook can be attributed to factors such as economic recovery, increased market demand, enhanced capacity for innovative development, the emergence of new growth drivers, and the implementation of policies and measures aimed at strengthening the industrial sector. Thank you.

Shou Xiaoli:

Thank you, Mr. Fu and friends from the media. Today's press conference is hereby concluded. Goodbye.

Translated and edited by Xu Xiaoxuan, Wang Yiming, Zhang Jiaqi, Zhang Rui, Cui Can, Ma Yujia, Liu Caiyi, Wang Wei, Yan Bin, Liu Qiang, Li Huiru, Zhu Bochen, Zhou Jing, David Ball, and Jay Birbeck. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.