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Read in Chinese
Speaker:
Mr. Sheng Laiyun, deputy commissioner of the National Bureau of Statistics
Chairperson:
Ms. Shou Xiaoli, deputy director general of the Press Bureau of the State Council Information Office (SCIO) and spokesperson of the SCIO
Date:
Oct. 18, 2023
Shou Xiaoli:
Ladies and gentlemen, good morning. Welcome to this press conference held by the State Council Information Office (SCIO). Today, we have our routine release of economic data, and we are very pleased to invite Mr. Sheng Laiyun, deputy commissioner of the National Bureau of Statistics (NBS), to brief you on the national economic performance of the first three quarters of 2023, and to take your questions.
Now, let's give the floor to Mr. Sheng for his introduction.
Sheng Laiyun:
Friends from the media, ladies and gentlemen, good morning. I'm very glad to be here again. As usual, first, I'll brief you on the national economic performance of the first three quarters of 2023, and then I'll answer your questions.
In the first three quarters, the national economy maintained an encouraging momentum of rebound and secured steady, high-quality development. In this period, faced with grave and complex international environment and challenging tasks in promoting reform, development and 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 principle of pursuing progress while ensuring stability, and fully applied the new development philosophy on all fronts. All regions and departments accelerated efforts to foster a new development pattern, took solid steps to promote high-quality development, implemented macroeconomic policy regulation in a precise and robust way, and made efforts to expand domestic demand, boost confidence, and fend off risks. As a result, the national economy sustained the momentum of recovery and improvement with positive factors amassing, as production and supply increased steadily, market demands continued to expand, employment and prices generally improved, and quality of development enhanced steadily.
According to the preliminary estimates, the gross domestic product (GDP) in the first three quarters reached 91,302.7 billion yuan, a year-on-year increase of 5.2% at constant price. By industry, the value added of the primary industry was 5,637.4 billion yuan, up by 4.0% year on year; that of the secondary industry was 35,365.9 billion yuan, up by 4.4%; and that of the tertiary industry was 50,299.3 billion yuan, up by 6.0%. By quarter, the GDP for the first quarter increased by 4.5% year on year, for the second quarter 6.3%, and for the third quarter 4.9%. The quarter-on-quarter GDP for the third quarter increased by 1.3%.
1. Agricultural production was generally good and production of animal husbandry grew steadily.
In the first three quarters, the value added of agriculture (crop farming) went up by 3.6% year on year. The total output of summer grain totaled 146.13 million tons, 0.9% lower than that of last year, ranking the second highest in history; that for early rice was 28.34 million tons, up by 0.8%. The autumn grain generally grew well with the sown area being stable with an increase, and another bumper harvest is expected for the year. In the first three quarters, the output of pork, beef, mutton and poultry was 69.74 million tons, up by 3.9% year on year. Specifically, the output of pork, beef, mutton and poultry was up by 3.6%, 5.0%, 5.2% and 4.0%, respectively; that of milk went up by 7.2% and eggs up by 2.1%. At the end of the third quarter, the number of pigs registered in stock was 442.29 million, down by 0.4% year on year. For the first three quarters, 537.23 million pigs were slaughtered, up by 3.3%.
2. Industrial production saw accelerated recovery and equipment manufacturing grew fast.
In the first three quarters, the total value added of industrial enterprises above the designated size grew by 4.0% year on year, 0.2 percentage points higher than that of the first half year. In terms of sectors, the value added of mining increased by 1.7% year on year, manufacturing went up by 4.4% and the production and supply of electricity, thermal power, gas and water grew by 3.5%. The value added of equipment manufacturing went up by 6.0%, 2.0 percentage points faster than that of the whole industrial enterprises above the designated size. An analysis by types of ownership showed that the value added of state holding enterprises was up by 4.6% year on year; that of share-holding enterprises was up by 4.8%; that of enterprises funded by foreign investors or investors from Hong Kong, Macao and Taiwan was up by 0.5%; and that of private enterprises was up by 2.3%. In term of products, the output of solar cells, charging piles and new-energy vehicles went up by 63.2%, 34.2% and 26.7%, respectively. In September, the total value added of industrial enterprises above the designated size increased by 4.5% year on year, the same as that of last month, 0.8 percentage points faster than that of July; or a month-on-month growth of 0.36%. In the first eight months, the total profits made by industrial enterprises above the designated size went down by 11.7% year on year, a decline narrowed by 5.1 percentage points compared with that in the first half year. Specifically, that for August went up by 17.2% year on year. In September, the Manufacturing Purchasing Managers' Index stood at 50.2%, 0.5 percentage points higher than that of last month and the Production and Operation Expectation Index was 55.5%.
3. Service sector maintained fast recovery and contact-and-gathering-based services and modern service industries played a stronger driving role.
In the first three quarters, the value added of services went up by 6.0% year on year. Specifically, the value added of accommodation and catering, information transmission, software and information technology services, leasing and business services, transport, storage and postal services and financial intermediation grew by 14.4%, 12.1%, 9.5%, 7.5% and 7.0%, respectively. In September, the Index of Services Production increased by 6.9% year on year, 0.1 percentage points higher than that of last month, and the growth rate kept picking up for two months in a row. Specifically, the Index of Services Production of accommodation and catering, information transmission, software and information technology services and transport, storage and postal services went up by 17.7%, 11.3% and 9.3%, respectively. In the first eight months, the business revenue of service enterprises above the designated size grew by 7.2% year on year. In September, the Business Activity Index for Services stood at 50. 9%, 0.4 percentage points higher than last month; and the Business Activity Expectation Index was 58.1%. Specifically, the Business Activity Index for water transportation, postal services, telecommunication, broadcast, television and satellite transmission services, Internet, software and information technology services and monetary and financial services stayed within the high expansion range of 55.0% and above.
4. Market sales was getting active and consumption of services grew fast.
In the first three quarters, the total retail sales of consumer goods reached 34,210.7 billion yuan, up by 6.8% year on year. Analyzed by different areas, the retail sales of consumer goods in urban areas reached 29,641.0 billion yuan, up by 6.7% year on year, and that in rural areas reached 4,569.7 billion yuan, up by 7.4%. Grouped by consumption patterns, the retail sales of goods were 30,500.2 billion yuan, up by 5.5%; the income of catering was 3,710.5 billion yuan, up by 18.7%. The sales of goods for basic living saw steady growth, with the retail sales of clothes, shoes, hats and textiles and of grain, oil and food by business above the designated size up by 10.6% and 5.3%, respectively. The sales of upgraded goods went up rapidly. The retail sales of gold, silver and jewelry, sports and recreational articles, and cosmetics by business above the designated size were up by 12.2%, 8.3% and 6.8%, respectively. The online retail sales reached 10,819.8 billion yuan, up by 11.6% year on year. Specifically, the online retail sales of physical goods were 9,043.5 billion yuan, up by 8.9%, accounting for 26.4% of the total retail sales of consumer goods. In September, the total retail sales of consumer goods went up by 5.5% year on year, 0.9 percentage points higher than that of last month, and the growth rate kept increasing for two months in a row; or up by 0.02% month on month. In the first three quarters, the retail sales of services went up by 18.9% year on year.
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5. Investment in fixed assets continued to scale up and investment in high-tech industries sustained fast growth.
In the first three quarters, the investment in fixed assets (excluding rural households) reached 37,503.5 billion yuan, up by 3.1% year on year, or 6.0% year on year after deducting price factors. Specifically, the investment in infrastructure was up by 6.2% year on year; that in manufacturing up by 6.2%, and that in real estate development down by 9.1%. The floor space of commercial buildings sold was 848.06 million square meters, down by 7.5% year on year; the total sales of commercial buildings were 8,907.0 billion yuan, down by 4.6%. By industry, the investment in the primary industry went down by 1.0% year on year, that in the secondary industry up by 9.0%, and that in the tertiary industry up by 0.7%. The private investment was down by 0.6%, or up by 9.1% year on year after deducting the investment in real estate development. The investment in high-tech industries grew by 11.4% year on year. Specifically, the investment in high-tech manufacturing and high-tech services grew by 11.3% and 11.8%, respectively. In terms of high-tech manufacturing, the investment in manufacturing of aerospace vehicle and equipment and in manufacturing of medical equipment, measuring instruments and meters grew by 20.7% and 17.0%, respectively. In terms of high-tech services, the investment in services for transformation of scientific and technological achievements and in professional technical services went up by 38.8% and 29.6%, respectively. In September, the investment in fixed assets (excluding rural households) went up by 0.15% month on month.
6. Imports and exports of goods was generally stable and trade structure continued to optimize.
In the first three quarters, the total value of imports and exports of goods was 30,802.1 billion yuan, down by 0.2% year on year. Specifically, the total value of exports was 17,602.5 billion yuan, up by 0.6%; the total value of imports was 13,199.6 billion yuan, down by 1.2%. The trade balance was 4,402.9 billion yuan in surplus. The imports and exports by private enterprises grew by 6.1%, accounting for 53.1% of the total value of imports and exports. The imports and exports with the Belt and Road partner countries grew by 3.1%, accounting for 46.5% of the total value of imports and exports. The exports of mechanical and electrical products grew by 3.3%, accounting for 58.3% of the total value of exports, 1.5 percentage points higher than that of the same period last year. In September, the total value of imports and exports was 3,742.5 billion yuan, a decline of 0.7% year on year, with the month-on-month growth increasing for two months on end. Among that, the total value of exports was 2,150.6 billion yuan, down by 0.6% year on year; the total value of imports was 1,591.9 billion yuan, down by 0.8%.
7. Consumer price increased mildly and decline of producer prices for industrial products continued to narrow.
In the first three quarters, the consumer price index (CPI) grew by 0.4% year on year. Grouped by commodity categories, prices for food, tobacco and alcohol went up by 1.1%; clothing up by 0.9%; housing down by 0.1%; articles and services for daily use up by 0.2%; transportation and communication down by 2.4%; education, culture and recreation up by 1.9%; medical services and health care up by 1.1%; and other articles and services up by 3.2%. In terms of food, tobacco and alcohol prices, prices for pork went down by 6.8%, fresh vegetables down by 3.1%, grain went up by 1.2%, and fresh fruits up by 6.0%. The core CPI excluding the prices of food and energy grew by 0.7% year on year. In September, the CPI maintained the same level year on year, or up by 0.2% month on month.
In the first three quarters, the producer prices for industrial products went down by 3.1% year on year. Specifically, the prices in September went down by 2.5% year on year, with the decline narrowed by 0.5 percentage points compared with that of the previous month, or up by 0.4% month on month. In the first three quarters, the purchasing prices for industrial producers went down by 3.6% year on year. Specifically, the prices in September went down by 3.6% year on year, with the decline narrowed by 1.0 percentage point compared with that of the previous month, or up by 0.6% month on month.
8. Employment was generally stable and surveyed urban unemployment rate declined.
In the first three quarters, the surveyed urban unemployment rate averaged 5.3%. In September, the surveyed urban unemployment rate was 5.0%, 0.2 percentage points lower than the previous month, falling for two months in a row. The surveyed unemployment rate of population with local household registration was 5.1%; that of population with non-local household registration was 4.9%, among which, the rate of the population with non-local agricultural household registration was 4.7%. The surveyed urban unemployment rate in 31 major cities was 5.2%, 0.1 percentage points lower than the previous month. The employees of enterprises worked 48.8 hours per week on average. By the end of the third quarter, the number of rural migrant workers totaled 187.74 million, up by 2.8% year on year.
9. Residents income increased steadily and income of rural residents grew faster than that of urban residents.
In the first three quarters, the nationwide per capita disposable income of residents was 29,398 yuan, a nominal growth of 6.3% year on year; the real growth was 5.9% after deducting price factors, 0.1 percentage points faster than that of the first half year. In terms of permanent residence, the per capita disposable income of urban households was 39,428 yuan, a nominal growth of 5.2% year on year and a real growth of 4.7%; the per capita disposable income of rural households was 15,705 yuan, a nominal growth of 7.6% year on year and a real growth of 7.3%. In terms of income source, the nationwide per capita salary income, net business income, net property income and net income from transfers grew by 6.8%, 6.7%, 3.7% and 5.8% in nominal terms, respectively. The median of the nationwide per capita disposable income of residents was 24,528 yuan with the nominal growth of 5.4% year on year.
Generally speaking, in the first three quarters, the national economy sustained the momentum of recovery and improvement with solid progress in high-quality development, which has laid a strong foundation for achieving the annual development targets. However, we should be aware that the external environment is becoming increasingly complex and grave while the domestic demand remains insufficient and the foundation for economic recovery and growth needs to be further consolidated. At 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 ensuring stability, and fully implement the new development philosophy. We need to focus on the top priority of high-quality development and the strategic task of fostering a new development pattern by expanding effective domestic demand, stimulating the vitality of market players and implementing and delivering the introduced policies more effectively to continuously enhance the economic performance, boost the endogenous driving force, improve the public expectations, and defuse risks and hidden dangers, so as to achieve the annual targets of economic and social development.
The data provided above represent the main indicators of China's economic performance in the first three quarters of this year. I'm now ready to take your questions.
Shou Xiaoli:
Thank you, Mr. Sheng. Now the floor is open for questions. Please identify the media outlet you represent before asking questions.
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Yicai:
What is your comment on the GDP growth rate in the third quarter? What are the highlights and positive changes in the economic performance during this period of time? Thank you.
Sheng Laiyun:
Thank you for your questions. 2023 marks the first year of China's economic recovery following a three-year period of pandemic-induced setbacks. Based on the economic data in the first three quarters released earlier, the national economy has withstood external risks and challenges, as well as the downward pressure from multiple intertwined domestic factors. As a result, the national economy has sustained a recovery momentum. Such momentum was more prominent, especially in the third quarter, as positive changes have taken place in multiple fields and indicators. These changes are mainly seen in the following aspects:
First, economic growth has experienced a steady recovery. As mentioned earlier, the GDP in the first three quarters saw a 5.2% year-on-year increase, with that of the third quarter growing 4.9% year on year, which is slower than the second quarter. This is mainly attributed to an increased economic aggregate when compared to the same period last year. As we know, the pandemic dealt a relatively heavy blow to the country in the second quarter of 2022, resulting in a GDP growth rate of only 0.4%. Nevertheless, the economy rebounded with a 3.9% growth rate in the third quarter. Therefore, after deducting economic aggregate factors, the average two-year growth rate of GDP in the third quarter of this year reached 4.4%, 1.1 percentage points higher than the second quarter. In this sense, we need to consider both year-on-year and month-on-month figures when evaluating economic recovery. From a month-on-month perspective, GDP grew by 1.3% in the third quarter of this year, 0.8 percentage points higher than the second quarter, demonstrating a consistent momentum of economic recovery. China's economic growth rate, be it the year-on-year figure or the aggregated figure for the first three quarters, ranks top among major economies in the world. This signifies a positive change.
Second, employment has improved. As I said earlier, the urban surveyed unemployment rate averaged 5.3% in the first three quarters, 0.3 percentage points lower than the same period last year, and the unemployment situation has been gradually improving month by month. The surveyed unemployment rate averaged 5.2% in the third quarter and stood at 5% in September. The improving employment situation is a significant indicator of economic recovery. This represents another positive change.
Third, prices have been kept generally stable. In September, China's CPI saw a month-on-month increase of 0.2% and remained unchanged compared with the same period last year. The figure grew by 0.4% year on year in the first three quarters of this year. The decline in the country's producer price index (PPI) has slowed down for three consecutive months. Specifically, the PPI in September dropped 2.5% year on year. The decline narrowed by nearly 3 percentage points, from the lowest point in June. This suggests that domestic demand is growing steadily.
Fourth, foreign trade has showcased better-than-expected growth. According to data released by the General Administration of Customs (GAC), in the first three quarters of this year, the total value of foreign trade experienced a 0.2% year-on-year decrease, remaining basically consistent with figures from the same period last year. This year, the world economy has been experiencing downward fluctuations with a decline in external demand. In addition, China's foreign trade sustained a high growth rate in previous years, and the total value remains relatively huge. Given this, concerns had previously arisen regarding how the foreign trade volume would experience a significant decline this year. However, based on the actual performance, the decline in the third quarter has significantly slowed down and exceeded expectations. This has provided crucial support for a steady economic recovery.
Fifth, the Chinese market has witnessed an increase in activity among market players. As mentioned earlier, there was a recovery in both the total retail sales of consumer goods and the consumption of services in the first three quarters of this year. During the Mid-Autumn Festival and the National Day holidays, there was a strong growth momentum in passenger flow, tourism spending, and revenues in the hotel and catering industries. This shows that the Chinese market is experiencing a higher level of activity, showcasing the potential and vitality of market consumption.
Sixth, business expectations have improved. The purchasing managers' index (PMI) for China's manufacturing sector was published recently, and the figure in September came in at 50.2%. Despite continuous declines in previous months, the PMI reading has once again stayed above the threshold, indicating economic expansion. This points to a sound recovery of China's real economy.
Seventh, the agricultural sector has posted a sound momentum. Despite a slight decline in summer grain production caused by unfavorable natural conditions, the prospects of the country's autumn grain production are promising, with a slight increase in grain acreage. Moreover, the increase in rainy weather is also generally conducive to the production of autumn grain. Preliminary estimates indicate that the annual grain output could potentially reach another historic high. In addition, the country's livestock industry has experienced steady growth, and the supply of agricultural products remains sufficient. This also lays a solid foundation for a continued and steady economic recovery.
Eighth, high-quality development has achieved concrete progress, and the quality of economic development has improved. From the perspective of innovation, the investment in high-tech industries grew rapidly, and the volume in the first three quarters of this year grew by 11.4%. The new energy vehicles, lithium batteries, and photovoltaic cells maintained fast growing momentum. According to statistics released by Customs, the export of these three goods in the first three quarters of this year rose by 41.7%, a relatively high figure. Another indicator is personal income. The incomes of both urban and rural residents grew steadily, and in the first three quarters of this year, China's personal income increased by 5.9% year on year in real terms, higher than GDP growth. The growth of enterprises' profits was ameliorated. From January to August, the growth of profits of industrial enterprises with an annual revenue of 20 million yuan or above from their main business operations was negative, but the drop rate was 3.8 percentage points less than the figure from January to July. In addition, in August, the growth of the business income of industrial enterprises turned from negative to positive, and the profits of enterprises grew by 17.2%.
The above-mentioned positive changes in eight respects show that the Chinese economy has shown an encouraging rebound momentum and demonstrates great resilience, potential, and vitality, which proves that the macro-economic policies made by the CPC Central Committee are powerful and effective. Of course, we need to be acutely aware that the economy is still in recovery, and some of the positive changes are preliminary. Whether some positive changes can be sustainable still needs observation. The challenges from the external environment and inadequate internal demand during the process of economic operation has not been relieved fundamentally. The basis for a steady economic recovery needs to be consolidated. In the next phase, we should take concrete actions to enhance the basis.
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Kyodo News:
Currently, the real estate industry and the international economic situation are complex. What do you predict regarding the economic situation in the fourth quarter of this year? Will the growth rate reach the expected target of 5%? Thank you.
Sheng Laiyun:
Thank you for your question. People are concerned about the economic trends in the fourth quarter of this year and whether the whole-year target and tasks could be accomplished. In the first three quarters of this year, the GDP grew by 5.2% year on year, laying a solid foundation for the completion of the whole-year expected target – 5%. According to our estimations, if the growth rate in the fourth quarter of this year can reach 4.4% or above, we will achieve the whole-year expected target of around 5%. From this perspective, we are very confident that we can accomplish the whole-year expected target.
First, as for the economic trends in the fourth quarter of the year, economic operations will maintain an encouraging rebound momentum. Figures in the first three quarters of this year show that production and demand, as well as expectation and operation of the real economy are all recovering. While economic operations show inertia, we believe that the trend of steady growth will continue in the fourth quarter.
Secondly, previously released policies and measures to ensure stable growth will continue to take effect. With their step-by-step implementation, more positive effects will be unleashed.
On the basis of the above-mentioned judgment, we conclude that the economy in the fourth quarter will continue to recover and maintain a general trend of rebounding. We are very confident that we will meet the expected target of 5%. Thank you.
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Market News International:
How much does service consumption currently contribute to economic growth? How do you anticipate the performance of service consumption in the fourth quarter of this year? In terms of future service consumption data, are there any further plans to better reflect the changes in Chinese residents' consumption?
Sheng Laiyun:
Thank you for your questions. So as to comprehensively show the changes in the consumer market, the NBS recently adjusted and improved its trade economic statistical methods and rules. Apart from improving the statistical approach on the total retail sales of consumer goods, a service consumption market statistical supervision system was established. In August, for the first time, we released the growth rate of service retail sales in the first seven months of this year. The total retail sales of consumer goods mainly reflect the situation regarding physical commodity retail sales and part of the service consumption in accommodation and catering. However, with social and economic development, especially industrial upgrading and consumption upgrading, service consumption is accelerating, and its proportion to consumption is increasing. So as to demonstrate the changes in the consumption market, we also added service retail sales for release.
Both merchandise and service retail sales maintained rapid recovery in the first three quarters of this year. In January-September, total retail sales of consumer products and services increased by 6.8% and 18.9% year on year. The rapid growth of services retail sales was mainly related to the development environment in the past two years. Last year was severely affected by the COVID-19 pandemic, which had a great impact on the contact-based service sectors, including accommodation, catering, and transportation. Since China optimized its pandemic response measures, the country's economic operations have returned to normal, and the service industry, especially the contact-based segments, has benefited the most. People have traveled more frequently, and the catering sector has become increasingly popular. Service consumption has recovered quickly.
Another indicator is per capita service consumption expenditure. In the first three quarters of this year, per capita service consumption expenditure increased by 14.2% year on year, accounting for 46.1% of the total per capita consumption expenditure. This was an increase of 2 percentage points compared with the same period last year. We can see that the economy is on a recovery track. Spurred by a series of consumption-stimulating policies, China's consumption market, especially service consumption, has rebounded and recovered well.
We will further improve the statistical survey system of service consumption and the entire consumption market. Currently, we only release statistics on cumulative growth rates of service retail sales, and we will release more data after the statistical methods and system are further improved. Detailed accounting data on the contribution rate of service consumption to GDP are not available at present. The contribution rate of consumption to economic growth reached 83.2% in the first three quarters of this year, a significant increase over the same period last year. Service consumption, with a relatively high growth rate, played an important role in driving economic growth.
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CCTV:
China has introduced a series of measures to bolster the private economy recently. What has been the effect? Thank you.
Sheng Laiyun:
Thank you for the question. The private economy plays an important role in the economic system, contributing more than 50% of tax revenue, more than 60% of GDP, and more than 80% of urban employment. It is an important foundation for the national economy and an important foundation for high-quality economic development. The CPC Central Committee and the State Council have attached great importance to the development of the private economy. The report to the 20th CPC National Congress stressed that China will work unswervingly both to consolidate and develop the public sector and to encourage, support, and guide the development of the non-public sector. This year, the CPC Central Committee and the State Council issued a guideline on boosting the growth of the private economy. All related departments and localities have introduced many policies and measures to promote the development of the private economy in accordance with the deployment and requirements of the CPC Central Committee and the State Council. With the meticulous implementation of those measures and policies, the private economy has seen positive changes, showing an overall recovery momentum.
From the perspective of investment, private fixed assets investment fell by 0.6% in the first three quarters year on year. Although growth was still negative, the decline was 0.1 percentage point narrower than that from January to August, which is an important change. Real estate investment accounted for more than one-third of private investment. If real estate investment is excluded, private investment increased by 9.1%, 0.1 percentage point faster than that from January to August. From the perspective of foreign trade, the imports and exports of private enterprises increased by 6.1% year on year in the first three quarters. Compared with the slight drop in the country's total trade volume, imports and exports of private enterprises maintained growth, accounting for 53.1% of the national total, a continuously higher proportion over the same period last year. Moreover, the NBS conducted a survey of 59,000 small and micro-enterprises. The survey shows that the production and order index and the overall business situation of these enterprises have generally improved, and their business prosperity index rose by 1.5 percentage points month on month. These statistics indicate that the private sector has shown an encouraging recovery momentum with the support of relevant policies.
We have also realized that the private economy, especially small and micro-businesses, has been greatly affected by the epidemic over the past three years, so business recovery requires a process. The PMI of large enterprises was above the boom-bust line of 50 in September, and the reading for small enterprises came in at 48. Therefore, it is necessary to continue to fully implement the policies and measures introduced by the CPC Central Committee and the State Council to boost the private economy, and intensify efforts to consolidate the foundation for the development of the private sector. Thank you.
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21st Century Business Herald:
We've noted the recent announcement from the NBS regarding their decision to conduct a nationwide sample survey on population changes in 2023. What are the primary reasons behind this survey? Additionally, how do you view the current population dynamics in China?
Sheng Laiyun:
Thank you for your questions. I've noted the media coverage on this topic, which indeed shows the public's attention to China's population trends. The 2023 sample survey on population changes is part of our standard procedural arrangements. According to our statistical survey system, we conduct a full census every decade, specifically in years ending in zero. For example, in 2020, we carried out the seventh national census. Mid-decade, typically in years ending in five, we conduct a 1% population sample survey, often termed a "mini-census." Therefore, by 2025, a 1% sample will be undertaken. In the intervening years, we execute a 1‰ (per mille) sample annually. Due to the associated costs, comprehensive censuses and larger sample surveys aren't feasible annually. Each year, we conduct a sample survey of population changes, collecting and reflecting the current total population, structural shifts, including birth and death rates, as well as fundamental demographic features. The primary objective is to scientifically and accurately capture population fluctuations, providing a solid statistical basis for the central government and relevant departments to formulate population policies.
Data collected from the seventh national census and the population sampling over the past two years reveal significant shifts in China's demographic structure, in line with socio-economic progress. These shifts include a declining birth rate, accelerated aging, and overall population changes. Last year, we observed a decline in the total population for the first time. However, it's crucial to note that our overall population remains substantial, especially with a working-age populace nearing 900 million. Furthermore, the educational attainment of our population is on the rise. The latest figures show that the average length of education for the working-age group is 10.93 years, which is nearly 11 years. Additionally, we have approximately 240 million individuals with higher education. Therefore, despite a numerical decrease, the quality of our population has seen a more rapid improvement, providing a valuable resource for the high-quality development of China's economy.
The 2023 sample survey will include about 500,000 households, roughly 1.4 million individuals. The household survey will commence on Nov. 1, our standard reference date, and will last about two weeks, ending on Nov. 15. I appeal to and earnestly request the households participating in our survey to actively cooperate with the population change sample survey and to provide the necessary information truthfully and accurately. In accordance with statistical laws, we will strictly maintain the confidentiality of the information provided by everyone. We also hope that all sectors of society, including the journalists present here, will actively support and oversee this process. Thank you.
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Bloomberg News:
Could you give us some insights on the growth contribution in the third quarter from capital formation, consumption and net exports? Thank you.
Sheng Laiyun:
Thank you for your question. The contributions of the three major components to GDP growth are indeed a concern for many. In the first three quarters, final consumption expenditure accounted for 83.2% of economic growth, propelling a 4.4 percentage point increase in GDP. Gross capital formation contributed 29.8%, driving a 1.6 percentage point increase in GDP. Meanwhile, net exports of goods and services detracted from growth by 13.0%, pulling GDP down by 0.7 percentage point. In the third quarter, due to the continuous rebound in consumption, a decline in exports, and a slowdown in investment growth, the economic growth engines saw a slight change in their impact pattern. The contribution of final consumption expenditure to economic growth increased, accounting for 94.8%, and boosting GDP growth by 4.6 percentage points. Gross capital formation contributed 22.3% to economic growth, increasing GDP by 1.1 percentage points. Net exports of goods and services had a contribution rate of -17.1%, pulling down GDP by 0.8 percentage point. These figures represent the contributions of the three major drivers of economic growth. Thank you.
Nanfang Daily, Nanfang Plus:
The National Day holiday, often dubbed the "Golden Week" holiday, has just ended, and consumption data from all parties have been released. We have noted that domestic tourism has increased compared with its level before the epidemic struck, which has led to an increase in consumption of catering, attractions, accommodation and other services. Do we expect a continuing rise in consumption in the fourth quarter? Will there be any policies to promote consumption in the near future? Thank you.
Sheng Laiyun:
I can assure you that consumption in the fourth quarter will continue to recover from that of the first three quarters.
First, in the first three quarters, the consumption of both goods and services, as well as household spending, continued to stabilize and revitalize. In this period, retail sales of services increased by 18.9% year on year, and the proportion of residents' per capita expenditure on services in per capita consumption expenditure rose by 2 percentage points year on year.
Second, the effects of consumption policies have become more evident. This year, efforts to stabilize growth and expand consumption have been prioritized. Relevant departments have introduced a series of policy initiatives to boost consumption, and local governments have stepped up their implementation. The impacts of these policies are expected to continue to unfold.
Third, the personal consumption base has been consolidated. Consumption is ultimately supported by income. The employment situation has generally improved this year. Personal income increased by 5.9% in the first three quarters, maintaining stable growth. This has laid a solid foundation for sustainable recovery and the growth of consumption in the future.
Fourth, the baseline for consumption-related indicators was low due to the impact of the epidemic in the fourth quarter of last year. For example, total retail sales of consumer goods fell by 2.7% year on year in the fourth quarter of last year, making the base effect conducive to an improvement in consumption data this year.
Based on these four reasons, I can assure you that household consumption will continue to recover in the fourth quarter. China possesses significant consumption potential and a large population. In addition, the country is at a critical stage of upgrading its consumption patterns. As the Chinese economy has shown encouraging signs of rebounding, overall consumption trends are expected to be positive. Of course, we need to emphasize that cultivating consumption capacity is crucial. We must continue to promote economic stability and growth, increase people's incomes, and fully leverage the basic role of consumption and the advantages of scale. Thank you.
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CNR:
I have noted that the recovery of the industrial sector further quickened in the first three quarters. What do you think of its current performance? And what future steps will be taken to restore growth in this sector? Thank you.
Sheng Laiyun:
Thank you for your questions. The industrial sector is the cornerstone of our real economy. To assess whether the foundation for economic recovery is solid and whether the growth can be sustained, the industrial sector is a very important aspect for us to observe. Judging from the performance in the first three quarters of this year, the industrial sector has maintained an encouraging and stable momentum of recovery. In the first three quarters, the total value-added of industrial enterprises above the designated size increased by 4%, and in the third quarter, it rose by 4.2%. In August and September, the total value-added of the industry continued to grow month on month. In September, the total value-added of industrial enterprises above the designated size grew by 4.5% year on year. Thus, it can be seen that economic conditions are recovering for the better.
By the way, in addition to the rebound in industrial growth, there have been some positive changes in a series of related business indicators. For instance, general economic conditions have improved, and the manufacturing purchasing managers' index (PMI) has returned to above the tipping point for the first time, reaching 50.2% in September. This is a leading indicator that can demonstrate entrepreneurs' optimism about the market.
The second positive change was that China's producer price index (PPI) narrowed its decline for three consecutive months, indicating demand for industrial products by economic entities was picking up.
The third positive change was that the profits of industrial enterprises turned positive in August, which was of great significance. As market demand improved and prices recovered, revenues for August were positive, and profits for the month increased by 17.2%. Although cumulative profits were still negative, they turned positive that month, which was a positive sign.
The fourth positive change is that both the industrial capacity utilization rate and the production-to-sales ratio are improving. Let me expound on two more figures: In the first three quarters, the national industrial capacity utilization rate was 74.8%, 0.4 percentage point higher than that in the year's first half. The production-to-sales ratio of industrial enterprises above the designated size was 96.8%, registering a rise of 0.6 percentage point compared with that in the first half of the year. Moreover, the production-to-sales ratios of industrial enterprises for July, August, and September all exceeded 97%, which shows that the overall market environment and corporate operations are improving. Therefore, we remain optimistic about the continued recovery of the industrial sector. Thank you.
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Cover News:
Recently, many regions issued a series of policies to boost the real estate sector. However, industry data showed that the real estate market has not yet been reinvigorated as expected. How do you see this phenomenon, and what are your predictions for future trends in the real estate sector? Thank you.
Sheng Laiyun:
Thank you. Everyone is very concerned about the development and recovery of the real estate sector. Real estate is indeed an essential pillar of the national economy, and its industry chain is relatively long, making it significantly influential on economic growth and operation. As for the real estate economy and its development, I would like to stress several points.
First, we need to recognize that adjustments in the real estate sector are conducive to the industry's transformation toward high-quality development. In China, real estate has maintained high growth for nearly 20 years, starting from the housing commercialization reform in 2003 and through to 2020. I would like to share some data with you. During the 2003-2020 period, we saw an average annual growth of 19.9% in real estate investment, 10.8% in sales area of commercial housing, and 20.3% in commercial housing sales. The data show that the real estate industry sustained high-speed growth from 2003 to 2020. Some scholars have even noted that, in terms of real estate development, China achieved what developed countries took over a century to do in less than 20 years. Therefore, the sustained high-speed expansion of the real estate industry made important contributions to the rapid and medium-high growth of China's economy in that period. However, like other industries, real estate cannot always sustain high growth. After a certain stage, such adjustments are normal and beneficial for eliminating outdated production capacity and optimizing structure, especially for high-quality development of the real estate industry. So, the current adjustment is beneficial for future development.
Second, there has been solid support for high-quality development of the real estate sector. In terms of China's development stage, we are still in the phase of economic transformation, upgrading, and high-quality development. Our per capita GDP has just surpassed $12,000. The urbanization rate of the permanent population is 65.2%, while that of the registered population is only 47.7%. Therefore, there is significant room for improvement in both the quantity and quality of urbanization. This means that our rigid and improvement-oriented housing demands are still significant. Additionally, we have achieved a comprehensively well-off society, with a per capita housing area of around 41 square meters. However, they are mostly small and medium-sized housing types, and as people's living standards improve, there is significant potential for improvement-oriented housing demand. So, based on these fundamentals, we believe that there is still solid support for high-quality and sustainable development of the real estate sector. It's not reasonable that people would lose confidence when the real estate is adjusted. That is also not in line with the changes in China's economic development stage.
Thirdly, since last year, the CPC Central Committee and the State Council have attached great importance to the sector and introduced a series of optimized policies to stabilize the real estate market. Just now, the reporter also mentioned the many policies in place, and their implementation will take a while. The initial implementation has made some positive effects. I will give you some more details. As for the real estate investment situation I just mentioned, it's clear that real estate investment continues to decline. September data show a month-on-month improvement. For example, the sales area of commercial housing had a negative growth rate of 10.2% in September, but it improved by 2 percentage points compared to August. The new construction area in the real estate sector also saw a narrowing of the decline in September, and it was a significant narrowing. Also we have data on the transaction volume of commercial housing in 70 large and medium-sized cities in September. The total transactions of new homes and second-hand housing turned positive in September, with a month-on-month increase of 2.8%. It marks the first time that they showed positive growth since April, after five consecutive months of decline. Therefore, based on these data, we believe that the optimized policies will have a continuous positive effect on the real estate sector. Of course, it still takes a while to see how these policies work, since the real estate industry is generally in a stage of adjustment. Therefore, we must better implement the policies at a later stage. Thank you.
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Jiemian News:
We have seen that China's CPI stayed flat compared with a year earlier, and the core CPI has been relatively low. Does that mean weak demands have not yet improved? How does the NBS view the inflation situation in the fourth quarter? Thank you.
Sheng Laiyun:
Thank you for your questions. China's CPI in September remains unchanged from a year earlier, but I need to stress that CPI in September increased on a month-on-month basis, with an increase of 0.2%. That the CPI in September stayed flat year on year is due to the comparison base last year, affected by the tail effect. The month-on-month data would be a very good way to review the short-term changes in prices. As of September, the CPI has been rising month on month for three consecutive months. The year-on-year decline in PPI has been narrowing significantly for three consecutive months. PPI in June dropped by 5.4% year on year, a low point in the year. PPI in September decreased by 2.5%, narrowing by 2.9 percentage points from June. It illustrates that prices have rebounded from a low level, signaling the recovery of the aggregate demand of society.
Secondly, changes in China's price indexes, especially in CPI, demonstrate clear structural features, and the core CPI was relatively stable. In the year to date, the CPI has dropped year on year. However, according to the performance of the food price index, in the first quarter, food prices rose by 3.7% year on year, while the price increase fell back to 1.2% in the second quarter. However, the year-on-year sharp decline in hog prices in the third quarter led to a decrease in the food price index, which had a significant impact on the performance of the CPI. In the price index for industrial consumption products, the prices of crude oil, especially the fluctuation of international crude oil prices, also exerted an important influence on the performance of prices. The core CPI, excluding the influence of food and energy prices, was generally stable. The core CPI in the first three quarters of this year rose by 0.7% year on year, with minor monthly fluctuation.
Thirdly, changes in China's prices are different from international trends. Recently, global commodity prices have risen sharply, and global inflation remains high. In spite of the U.S.'s rate hikes, the CPI in the U.S. increased by 3.7% in September year on year, and the CPI in the eurozone rose by more than 4%. Therefore, high inflation has become a crucial factor in influencing economic recovery and development. However, China has maintained generally reasonable and sufficient liquidity, and its price trends stand in sharp contrast to international price trends. From the perspective of macro regulation, China's prices are a highlight when looked at from a global context. Surely, it is not the case that the lower the price, the better. With the recovery of aggregate demand and the economy, prices will rise moderately. Thank you.
Shou Xiaoli:
Thanks to Mr. Sheng and friends from the media. Today's briefing is hereby concluded. See you!
Translated and edited by Xu Xiaoxuan, Li Huiru, Wang Qian, Zhu Bochen, Mi Xingang, Yuan Fang, Yang Xi, Zhang Junmian, Wang Yiming, Li Xiao, Yan Bin, Zhou Jing, Xiang Bin, Wang Wei, Xu Kailin, 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.
