Read in Chinese
Speaker:
Mr. Sheng Laiyun, deputy commissioner of the National Bureau of Statistics (NBS)
Chairperson:
Ms. Shou Xiaoli, director general of the Press Bureau of the State Council Information Office (SCIO) and spokesperson of the SCIO
Date:
Oct. 18, 2024
Shou Xiaoli:
Ladies and gentlemen, good morning. Welcome to this press conference held by the State Council Information Office (SCIO). This is a regular briefing on China's economic data. Today, we have invited Mr. Sheng Laiyun, deputy commissioner of the National Bureau of Statistics (NBS), to brief you on China's national economic performance in the first three quarters of 2024 as well as to take your questions.
I'll now give the floor to Mr. Sheng for his briefing.
Sheng Laiyun:
Ladies and gentlemen, good morning. I am delighted to be here once again to prove an update on China's economic performance.
As usual, I will brief you on the first three quarters of 2024’s economic performance and then answer your questions.
In the first three quarters, the national economy was generally stable, with steady growth and positive factors promoting the recovery of economy were accumulated.
In the first three quarters, in face of a complicated and severe external environment and new situations, new problems of domestic economic development and 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 plans made by the CPC Central Committee and the State Council, adhered to the general principle of pursuing progress while ensuring stability, strengthened macro regulations, deepened reform and opening-up, expanded domestic demand, optimized economic structure, effectively implemented existing policies and accelerated the introduction of incremental policies. As a result, the national economy was generally stable with steady progress, featuring steady increases with production and demand, generally stable employment and pricing, effectively promoted people’s well-being, steady growth of new quality productive forces and solid progress with high-quality development. In September, most of the indicators of production and demand improved, market expectations were boosted and positive factors promoting the economy’s recovery were accumulated.
According to preliminary estimates, the gross domestic product (GDP) in the first three quarters of 2024 reached 94,974.6 billion yuan, up by 4.8% year on year at constant price. By industry, the value added of the primary industry was 5,773.3 billion yuan, up by 3.4% year on year; that of the secondary industry was 36,136.2 billion yuan, up by 5.4%; and that of the tertiary industry was 53,065.1 billion yuan, up by 4.7%. By quarter, the GDP grew by 5.3% year on year in the first quarter, 4.7% in the second quarter and 4.6% in the third quarter. The GDP for the third quarter increased by 0.9% quarter on quarter.
First, agricultural production witnessed good momentum and animal husbandry was generally stable.
In the first three quarters, the value added of agriculture (crop farming) went up by 3.7% year on year. The total output of summer grain and early rice was 177.95 million tons, 3.46 million tons more than that of last year, an increase of 2.0%. The autumn harvest went smoothly and another bumper harvest is to be expected for the year. In the first three quarters, the output of pork, beef, mutton and poultry was 70.44 million tons, up by 1.0% year on year. Of this total, the output of beef and poultry grew by 4.6% and 6.4%, respectively, while that of pork and mutton dropped by 1.4% and 2.2%, respectively. The output of milk dropped by 0.1% and that of eggs went up by 3.5%. At the end of the third quarter, the number of pigs registered in stock was 426.94 million, down by 3.5% year on year. In the first three quarters, 520.30 million pigs were slaughtered, down by 3.2%.
Second, industrial production registered stable growth and equipment manufacturing and high-tech manufacturing grew fast.
In the first three quarters, the total value added of industrial enterprises above the designated size grew by 5.8% year on year. In terms of sectors, the value added of mining increased by 2.9% year on year, that of manufacturing increased by 6.0%, and that of electricity, thermal power, gas and water’s production and supply increased by 6.3%. The value added of equipment manufacturing grew by 7.5% year on year while that of high-tech manufacturing was up by 9.1%, making their growth rates faster than that of all industries above designated size by 1.7 and 3.3 percentage points, respectively. An analysis by types of ownership showed that the value added of state holding enterprises was up by 4.3% year on year; that of share-holding enterprises was up by 6.1%; that of enterprises funded by foreign investors or investors from Hong Kong, Macao and Taiwan was up by 3.9%; and that of private enterprises was up by 5.5%. In terms of products, the production of new energy vehicles, integrated circuits and 3D printing devices went up by 33.8%, 26.0% and 25.4% year on year. In September, the total value added of industrial enterprises above the designated size went up by 5.4% year on year, 0.9 percentage point faster than that of the previous month, or up by 0.59% month on month. In September, the Manufacturing Purchasing Managers' Index stood at 49.8%, 0.7 percentage point higher than that of the previous month. The Production and Operation Expectation Index was 52.0%. In the first eight months, the total profits made by industrial enterprises above the designated size were 4,652.7 billion yuan, up by 0.5% year on year.
Third, the service sector continued to recover and modern services enjoyed sound development.
In the first three quarters, the value added of services went up by 4.7% year on year. Specifically, the value added of information transmission, software and information technology services, leasing and business services, transport, storage and postal services, accommodation and catering, and wholesale and retail grew by 11.3%, 10.1%, 6.8%, 6.3% and 5.4%, respectively. In September, the Index of Services Production increased by 5.1% year on year, 0.5 percentage point faster than that of the previous month. Among them, the Index of Services Production of information transmission, software and information technology services, leasing and business services, and financial intermediation went up by 11.4%, 9.7% and 6.5%, respectively. In the first eight months, the business revenue of service enterprises above the designated size grew by 7.7% year on year. In September, the Business Activity Index for Services stood at 49.9%. The Business Activity Expectation Index for Services was 54.6%. Among which, the Business Activity Index for industries like postal services, telecommunication, broadcast, television and satellite transmission services, internet software and information technology services as well as monetary and financial services were within the high expansion range of 55.0% and above.
Fourth, market sales kept growing and sales of upgraded goods witnessed good momentum.
In the first three quarters, the total retail sales of consumer goods reached 35,356.4 billion yuan, up by 3.3% year on year. Analyzed by different areas, the retail sales of consumer goods in urban areas reached 30,586.9 billion yuan, up by 3.2% year on year, and that in rural areas stood at 4,769.5 billion yuan, up by 4.4%. Grouped by consumption patterns, the retail sales of goods were 31,414.9 billion yuan, up by 3.0%, while the income of catering was 3,941.5 billion yuan, up by 6.2%. Certain basic living goods and upgraded goods enjoyed favorable sales. Retail sales for grain, oil and food as well as of beverages by enterprises above the designated size went up by 9.9% and 4.5%, respectively, and that of communication equipment and of sports and recreational articles grew by 11.9% and 9.7%, respectively. Online retail sales reached 10,893.0 billion yuan, up by 8.6% year on year. Specifically, the online retail sales of physical goods were 9,072.1 billion yuan, up by 7.9%, accounting for 25.7% of the total retail sales of consumer goods. In September, the total retail sales of consumer goods went up by 3.2% year on year, 1.1 percentage points faster than that of the previous month, or up by 0.39% month on month. The sales of automobiles and household appliances witnessed good momentum. In September, the retail sales of household appliances and audio-visual equipment, communication equipment, and cultural and office supplies by enterprises above the designated size increased by 20.5%, 12.3% and 10.0%, respectively. The retail sales of automobiles and furniture both increased by 0.4%, with the growth rate shifting from negative to positive. In the first three quarters, the retail sales of services went up by 6.7% year on year.
Fifth, investment in fixed assets continued to expand and investment in high-tech industries grew fast.
In the first three quarters, investments in fixed assets (excluding rural households) reached 37,897.8 billion yuan, up by 3.4% year on year. Investments in fixed assets was up by 7.7%, with investments in real estate development deducted. Specifically, the investment in infrastructure grew by 4.1%; that in manufacturing grew by 9.2%; and that in real estate development dropped by 10.1%. The floor space of newly-built commercial buildings sold was 702.84 million square meters, down by 17.1% year on year, a decline narrowed by 1.9 percentage points and 0.9 percentage point, respectively, compared with that in the first half of the year and in the first eight months. The total sales of newly-built commercial buildings was 6,888.0 billion yuan, down by 22.7%, a decline narrowed by 2.3 percentage points and 0.9 percentage point, respectively, compared with that in the first half of the year and in the first eight months. In terms of industry, investment in the primary industry went up by 2.3% year on year, that in the secondary industry increased by 12.3% and that in the tertiary industry decreased by 0.7%. Private investment declined by 0.2%, or up by 6.4% with the investment in real estate development deducted. The investment in high-tech industries grew by 10.0% year on year, of which the investment in high-tech manufacturing and high-tech services grew by 9.4% and 11.4%, respectively. In terms of high-tech manufacturing, investment in the manufacturing of aerospace vehicles and equipment as well as in the manufacturing of electronic and communication equipment grew by 34.1% and 10.3%, respectively. In terms of high-tech services, the investment in professional technical services, e-commerce services and services for transformation of scientific and technological achievements grew by 31.8%, 14.8% and 14.8%, respectively. In September, the investment in fixed assets (excluding rural households) increased by 0.65% month on month.
Sixth, imports and exports of goods grew fast and trade structures continued to optimize.
In the first three quarters, the total value of imports and exports of goods was 32,325.2 billion yuan, an increase of 5.3% year on year. The total value of exports was 18,614.7 billion yuan, up by 6.2%. The total value of imports was 13,710.4 billion yuan, up by 4.1%. The trade balance was 4,904.3 billion yuan in surplus. Private enterprises’ imports and exports grew by 9.4%, accounting for 55.0% of the total value of imports and exports, 2.1 percentage points higher than that of the same period last year. The imports and exports with Belt and Road partner countries grew by 6.3%, accounting for 47.1% of the total value of imports and exports. The exports of mechanical and electrical products grew by 8.0%, accounting for 59.3% of the total value of exports. In September, the total value of imports and exports was 3,748.0 billion yuan, up by 0.7% year on year. Specifically, the total value of exports was 2,165.3 billion yuan, up by 1.6%. The total value of imports was 1,582.7 billion yuan, down by 0.5%.
Seventh, consumer prices grew mildly and producer prices for industrial products declined.
In the first three quarters, the consumer price index (CPI) rose by 0.3% year on year, 0.2 percentage point higher than that of the first half of the year. Grouped by commodity categories, pricing for food, tobacco and alcohol went down by 0.4%; clothing up by 1.5%; housing up by 0.1%; articles and services for daily use up by 0.7%; transportation and communication down by 1.3%; education, culture and recreation up by 1.7%; medical services and health care up by 1.4%; and other articles and services up by 3.4%. In terms of pricing of food, tobacco and alcohol, the price for fresh fruits went down by 4.7%, grain up by 0.2%, fresh vegetables up by 3.3% and pork up by 5.8%. The core CPI, excluding the prices of food and energy, grew by 0.5% year on year. In September, the CPI went up by 0.4% year on year, or maintained the same level month on month.
In the first three quarters, producer prices for industrial products went down by 2.0% year on year, with the decline narrowed by 0.1 percentage point compared with that of the first half of the year. Specifically, prices in September dropped by 2.8% year on year, or down by 0.6% month on month. In the first three quarters, purchasing prices for industrial producers went down by 2.1% year on year. Specifically in September, prices dropped by 2.2% year on year, or down by 0.8% month on month.
Eighth, employment was generally stable and the urban surveyed unemployment rate declined slightly.
In the first three quarters, the urban surveyed unemployment rate averaged 5.1%, down by 0.2 percentage point over that of the same period last year. In September, the urban surveyed unemployment rate was 5.1%, 0.2 percentage point lower than that of the previous month. The surveyed unemployment rate of the population with local household registration was 5.2% and that of the population with non-local household registration was 4.8%, of which, the rate of the population with non-local agricultural household registration stood at 4.6%. The urban surveyed unemployment rate in 31 major cities was 5.1%, 0.3 percentage point lower than that of the previous month. The average weekly working hours of workers employed in the country's enterprises was 48.8 hours. By the end of the third quarter, the number of rural migrant workers totaled 190.14 million, up by 1.3% year on year.
Ninth, household incomes continued to grow and income growth of rural households outpaced that of urban households.
In the first three quarters, the nationwide per capita disposable income of households was 30,941 yuan, a nominal growth of 5.2% year on year, with real growth being 4.9% after deducting price factors. In terms of permanent residence, the per capita disposable income of urban households was 41,183 yuan, a nominal growth of 4.5% year on year and a real growth of 4.2%. The per capita disposable income of rural households was 16,740 yuan, a nominal growth of 6.6% year on year and a real growth of 6.3%. In terms of income sources, the nationwide per capita salary income, net business income, net property income and net income from transfers grew in nominal terms by 5.7%, 6.4%, 1.2% and 4.9%, respectively. The median of the nationwide per capita disposable income of households was 25,978 yuan with a nominal growth of 5.9% year on year.
Generally speaking, the national economy was largely stable with steady progress in the first three quarters, and the effects of policies continued to manifest with major indicators recently showing positive changes. However, we should be aware that the external environment is increasingly complicated and severe, and the foundation for sound economic recovery and growth still needs to be strengthened. Next, we must follow the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, fully implement the guiding principles of the 20th CPC National Congress and the second and third plenary sessions of the 20th CPC Central Committee, strictly implement the decisions and plans of the CPC Central Committee and the State Council, adhere to the general principle of pursuing progress while ensuring stability, fully and faithfully apply the new development philosophy on all fronts, and accelerate the efforts to create a new pattern of development. We must intensify the synergy of existing and incremental policies, advance the implementation and delivery of policies as well as consolidate and enhance the momentum for economic recovery and growth, so as to achieve the annual targets of economic and social development.
That's all I have to say about the main indicators of the national economy in the first three quarters of 2024. Next, I am happy to answer your questions.
_ueditor_page_break_tag_
Shou Xiaoli:
Thank you, Mr. Sheng. Now, the floor is open for questions. Please state the news organization you represent before asking your questions. You may now raise your hand.
CCTV:
Overall, China's economy has performed stably since the beginning of this year, but there have also been some new problems and situations. How do you assess the economic performance within the first three quarters as well as the performance in the third quarter? Thank you.
Sheng Laiyun:
Thank you for your question. Since the beginning of this year, the domestic and international landscapes have been complex and volatile, with intertwined external changes and disruptions and increasing risks and challenges. Domestically, the economy is at a critical stage of structural adjustment and transformation where cyclical and structural contradictions are intertwined, thus the pains of adjustment are being unleashed. Faced with these new situations and problems in economic operations, the CPC Central Committee has exercised overall leadership, faced up to the difficulties, ensured sound decision-making and has promptly strengthened macro regulations. Particularly, in late September, an important meeting of the Political Bureau of the CPC Central Committee convened and released a package of incremental policies, greatly boosting market confidence and unleashing market vitality. Overall, in the first three quarters, national economic operations were stable and saw progress. In September, major economic indicators showed positive changes and the positive factors that drove the economy upward also accumulated. Looking at the data from the first three quarters, three notable characteristics stand out:
First, despite slight fluctuations in growth during the second and third quarters, overall economic operation has remained generally stable and has not changed. From the perspective of four major macroeconomic indicators—growth, employment, inflation and international balance of payments—the economy remained generally stable in the first three quarters. As I have just announced, the economy grew by 4.8% in the first three quarters, with a 5.3% growth in the first quarter, 4.7% in the second and 4.6% in the third. These fluctuations are minor and near the expected target. Employment and price trends were also generally stable. The surveyed urban unemployment rate was 5.1% for the first three quarters, remaining at 5.1% in the first half of the year. The surveyed unemployment rate remained relatively stable, but there was a slight variation with 5.0% in the second quarter and 5.2% in the third quarter. The CPI which reflects the degree of inflation rose by an average of 0.3% over the first three quarters: flat in the first quarter, up by 0.3% in the second quarter and up by 0.5% in the third quarter. Additionally, a basic equilibrium was maintained in the balance of payments. The situation in relation to foreign trade this year has been better than expected with exports growing by 6.2% in the first three quarters, and our foreign exchange reserves returning to $3.3 trillion. Thus, based on the four major macroeconomic indicators—growth, employment, inflation and international balance of payments—economic operations in the first three quarters were generally stable, and the overall stable tone of economic operations has not changed.
Second, the trend of solid progress made in pursuing high-quality development has not changed. We are now in a critical stage of transformation and upgrading, with the main task being promoting the transition of development model and advancing high-quality economic development. In the first three quarters, all regions fully and faithfully applied on all fronts the new development philosophy, firmly advancing high-quality economic development and making new progress in achieving innovative, coordinated, green and open development for all. In terms of development driven by innovation, investments in high-tech industries continued to grow rapidly in the first three quarters with the value-added of large high-tech manufacturing enterprises growing by 9.1% year on year, 3.3 percentage points higher than the average of large industrial enterprises. In terms of coordinated development, whether it's industrial structure, demand structure or regional structure, we are moving towards more coordinated development. From the perspective of industrial structure, the proportion of value-added of the manufacturing industry in that of large enterprises continued to increase. From the perspective of demand structure, the proportion of investment in high-tech industries continued to increase. In terms of green development, green industries like new energy vehicles, lithium-ion batteries and photovoltaic products – the "new trio" – continued to maintain double-digit, high growth. The production and consumption of wind power, nuclear power and photovoltaic power generation also maintained relatively rapid growth. In terms of open development, all regions resolutely advanced high-standard opening up, and, despite the complex and volatile international environment, exports grew by 6.2%. Exports to BRI partner countries grew even faster than the average rate. In terms of development for all, residents' income growth in the first three quarters slightly outpaced GDP growth, people’s wellbeing was ensured, and strong progress was made in food security and energy supply. This year, grain production achieved another bumper harvest. Thus, across these dimensions, China's economy continues to maintain the trend of stable high-quality development, improving structure and rising quality while also ensuring reasonable output growth.
Third, a key point I would like to highlight is that September saw positive changes in the national economy with marginal improvements in most indicators, which signals a trend of bottoming out and stabilizing. Under the influence of a series of policies, especially after the important meeting of the Political Bureau of the CPC Central Committee in late September, a package of incremental policies has been rapidly introduced, greatly boosting market confidence, improving expectations and revitalizing market dynamics. The main indicators for September show positive changes in economic performance. From the perspective of production, both industrial production and services showed marginal improvements. The value-added of large industrial enterprises grew by 5.4% year on year in September, up by 0.9 percentage point compared with August, marking the first rebound after four months of decline in industrial growth. The service production index increased by 5.1%, up by 0.5 percentage point compared with August. From the perspective of demand, total retail sales of consumer goods grew by 3.2% in September, up by 1.1 percentage points compared with August. Fixed asset investment grew by 3.4% year on year from January to September, remaining flat compared to the January-August period. This stability is notable because it followed several months of declining growth rates with the fixed asset investment. Additionally, market expectations have marginally improved. The manufacturing PMI in September was 49.8%, up by 0.7 percentage point compared with August, with the production index rising by 1.4 percentage points to 51.2%. We also conducted a business survey of 100,000 large enterprises, showing that the proportion of large industrial enterprises that expect optimistic fourth-quarter operations increased by 1.3 percentage points from the prior quarter and by 0.9 percentage point year on year. These changes indicate that market expectations are indeed improving positively. Additionally, another positive change in September was the increased vitality of the stock and real estate markets. In August, trading volumes on the Shanghai and Shenzhen stock exchanges fell by 15.3%, but in September trading volumes surged by 32.7%. Real estate market transactions have also become more active, and, although there are fluctuations in sales area and sales value, the accumulated declines are narrowing. During the National Day holiday, as you can see from reports on the Internet, home viewings and real estate transactions both rebounded markedly, reflecting an increase in market activity.
From the perspectives outlined above, we calculate that September saw positive changes in macroeconomic performance, indicating signs of stabilization. However, we also recognize that these changes are still preliminary and that the foundation for a robust economic recovery is not yet solid. In the next phase, we must diligently implement the CPC Central Committee's strategic decisions, accelerate the execution of a comprehensive set of incremental policies and reinforce existing measures to create a synergistic policy environment. This will help consolidate the emerging trend of economic stabilization and recovery, while continuously driving upward economic momentum, optimizing structural adjustments and fostering positive development. Thank you!
_ueditor_page_break_tag_
Hongxing News:
Since the beginning of this year, a series of macroeconomic measures have been introduced, including policies to encourage large-scale equipment upgrades and consumer goods trade-ins (the "two new" policies), adjustments and optimizations for the real estate sector as well as the issuance and effective use of ultra-long-term special treasury bonds and special-purpose bonds for local governments. Can you share how effective these measures have been so far? Thank you.
Sheng Laiyun:
Thank you for your question. In response to the new challenges and situations arising in the economy this year, the CPC Central Committee has made sound decisions and has timely implemented a range of policies to support stable economic operations. As you mentioned, this includes the large-scale equipment upgrades and consumer goods trade-ins, adjustments to real estate policies and the effective use of ultra-long-term special treasury bonds and special-purpose bonds for local governments. Notably, as I mentioned earlier, in late September the country announced a package of incremental policies. These measures have significantly boosted market confidence, with some already taking effect and others being rolled out at an accelerated pace. We will see their impact unfold over time.
Judging by the policies rolled out in the first three quarters, the policy outcomes have been quite remarkable. I'll present some data to support this, which I've summarized as "five things that work."
Firstly, these policies have effectively unleashed domestic demand potential. From a consumption perspective, the appliance and audio-visual equipment retail sales at designated large enterprises grew by 4.4% year over year in the first three quarters. This was bolstered by the trade-in policy. The impact was even more pronounced in September for items covered by the trade-in policy, including cars, home appliances, office supplies and home furnishing. In July, relevant departments issued Several Measures to Enhance Support for Large-Scale Equipment Renewal and Consumer Goods Trade-Ins, allocating approximately 300 billion yuan in ultra-long-term special treasury bonds to implement the "two new" policies. Regions also accelerated the issuance of detailed rules, so these policies positively influenced consumption in September. Retail sales of automobiles increased by 0.4% in September, realizing positive turnaround after several months of decline including a 7.3% drop in August. Retail sales of household appliances and audio-visual equipment grew by 20.5% in September, a significant acceleration of 17.1 percentage points compared to August. Retail sales of cultural and office supplies grew by 10% in September, recovering from a 1.9% drop the previous month. Furniture sales also turned from negative to positive in September. From these aspects, the "two new" policies have had a positive effect on consumption and investment, demonstrating an exemplary effect. To report a figure, in the first three quarters, investment in equipment and tools grew by 16.4% year over year, 13 percentage points faster than the overall investment, driving a 2.1 percentage-point increase in total investment and contributing over 60%.
Secondly, these policies have effectively promoted the production of related industries and products. This is the effect of the "two new" policies from the production side. Let me share a few figures: In the first three quarters, the manufacturing of ships and related devices, broadcasting and television equipment, and communication equipment grew by 20.5%, 19.8% and 12.9%, respectively, with these industries experiencing rapid growth driven by large-scale equipment renewal. The production of food manufacturing machinery, specialized equipment for agricultural product processing and specialized packaging equipment increased by 38.1%, 34.6% and 11.8%, respectively. In the first three quarters, the production of new energy vehicles grew by 33.8% while related charging pile production increased by 57.2%. Household refrigerators, air conditioners and smart TVs also achieved rapid growth.
Thirdly, these policies have effectively supported economic stabilization and recovery. This is a natural outcome, as positive changes on both the production and demand sides have led to improvements in key metrics across industry, services, investment and retail. In September, several production and demand indicators showed marginal improvements, indicating that the economy is stabilizing and recovering.
Fourthly, these policies have effectively improved market expectations. Continuous reinforcement of macroeconomic policies has effectively boosted market confidence, with businesses feeling optimistic about their performance in the fourth quarter. In September, the manufacturing PMI rose by 0.7 percentage point from the previous month and the production index rose by 1.4 percentage points, with business conditions for monitored enterprises across traditional and emerging industries both seeing significant improvements.
Fifthly, these policies have effectively revitalized market activity. From the perspective of financial markets, both the stock market and the real estate market have rebounded, with the stock market showing a clear recovery and real estate transactions becoming more active.
Considering these five aspects, we believe that the series of policies issued by the central government to stabilize growth, the real estate market and market expectations are having a positive effect. Some policies are still being implemented. We hope that local governments will urgently issue corresponding detailed rules to enhance the implementation of these central policies, allowing them to unleash greater potential and consolidate the trend of economic stabilization and recovery. Thank you!
_ueditor_page_break_tag_
South China Morning Post:
I have a question about the real estate industry. Could you elaborate on the current situation in the real estate sector? According to the latest data, has there been any improvement in the real estate industry since the government announced new policies to prop up the property market on May 17? What are your views on future trends, especially considering the recent introduction of many new policies? Thank you.
Sheng Laiyun:
Thank you for your questions. The real estate market has been adjusting continuously over the past two years. As a result, the central and local governments have launched a series of policies in the last two years to stabilize the real estate market and promote its healthy development, including the new real estate policy issued on May 17, as you mentioned, and a series of stabilization and recovery policies introduced by relevant departments since September, following a central Politburo meeting. Just yesterday, I noted that several departments have held press conferences here, comprehensively detailing the meaning, measures and effects of these real estate policies. I share the general sentiment that these policy measures are effectively stabilizing the real estate market as well as boosting confidence.
From our statistical data, in the first three quarters, these real estate policies played a positive role in stabilizing the market and halting the sector's decline. I just reported in several data points that while real estate development investment remained at minus 10.1% from January through September, the rate of decline narrowed compared with the January-August period, signaling a positive trend. Although the real estate sector is still undergoing adjustments in terms of both sales area and value, the decline has narrowed. The decrease in newly built commercial housing sales area narrowed by 1.9 percentage points compared to the first half of the year, slowing for four consecutive months, while sales value narrowed for five consecutive months. Additionally, central government departments supported real estate companies in enhancing liquidity. Consequently, funds received by real estate development enterprises from January to September also saw a narrowing decline, decreasing by 2.6 percentage points compared to the first half of the year, with the decline narrowing for six consecutive months. These developments indicate that real estate policy measures are gradually taking effect and steering the property market toward stabilization.
With the rollout and implementation of the comprehensive real estate policy package, we maintain an optimistic outlook for the property market going forward. As discussed at yesterday's press conference, this package of measures, which aims at stabilizing the market and halting the decline, is quite substantial, involving multiple departments and levels. Once fully implemented, these measures will certainly have a positive impact. Based on recent changes in real estate professionals' expectations and actual transactions during the National Day holiday week, we have reason to be optimistic about future market trends. I'd like to share two data points from our recent monthly survey of real estate developers and agencies in 70 large and medium-sized cities. Among real estate professionals, the proportion expressing optimism about new home sales in September increased by 10 percentage points compared with the previous month. For second-hand home sales, those expressing optimism rose by 6.5 percentage points. This improvement in confidence is quite significant.
Additionally, everyone has noticed changes in the real estate market during the National Day holiday week, with many properties seeing significant improvements in both visitor traffic and transaction volume. According to preliminary statistics from some market institutions, the transaction area for new homes increased by 102% during the holiday week, while the second-hand home transaction area rose by 205%. These changes are quite remarkable. Therefore, we have reason to believe that the real estate market will show positive developments. Thank you.
_ueditor_page_break_tag_
China Business Network:
We have seen new macroeconomic policies introduced recently. How will the economy perform in the fourth quarter? Additionally, with just over two months left until year-end, can annual GDP growth reach our target of about 5%? Thank you.
Sheng Laiyun:
Thank you for your question. I understand everyone is concerned about economic trends in the fourth quarter. Based on economic performance in the first three quarters and the implementation effects of incremental policies, we believe favorable conditions for economic stabilization and recovery are increasing. Our confidence in achieving the target of about 5% growth is strengthening.
First, the GDP growth of 4.8% in the first three quarters has established a solid foundation for achieving the annual target. This growth rate didn’t come easily. The macroeconomic environment has been complex and volatile this year, particularly with mounting external pressures and ongoing internal structural adjustments, which continue to cause ongoing transitional challenges. However, the Chinese economy has withstood these pressures, maintaining stability. This demonstrates the strong resilience and potential of China's economy, and this growth rate provides a foundation for sustained recovery ahead.
Second, economic performance showed positive changes in September, strengthening our confidence in development. Particularly after the Political Bureau of the CPC Central Committee meeting, a series of incremental policies were expedited and implemented, significantly boosting market participants' confidence. When confidence exists, businesses invest more readily and consumers are more willing to spend. Moreover, some expectation indicators have shown positive changes.
Third, the combined force of these policies will strengthen economic recovery momentum. These policies will positively impact investment, consumption and industrial development. There remains significant room for new policies, and existing ones carry substantial value. Local regions are urgently implementing these policies to achieve tangible results, which will greatly boost economic development momentum. The central government's recent policy package includes measures for stable economic growth and policies promoting structural optimization and new quality productive forces. Additionally, reform plans introduced after the third plenary session of the 20th CPC Central Committee are being implemented. Thus, aggregate policies, industrial policies and structural reform measures will work together synergistically.
Fourth, leading indicators point to trends of economic stabilization and positive changes. Early October electricity consumption, changes in production material prices, and consumer activity during the National Day holiday all suggest economic stabilization in the fourth quarter is highly probable. Prices, especially those of production materials, are crucial leading economic performance indicators. Comparing early October with late September, 33 out of 50 monitored production materials saw price increases, three remained stable, and only 14 declined. In contrast, between mid-September and early September, only 18 increased, two stayed the same, and 30 decreased. The recovery of prices is beneficial for improving business operating conditions. For example, steel and chemical product prices have shown positive signs of stabilization and recovery. National Day holiday data highlights China's consumer potential, with increased traveler numbers. According to the Ministry of Culture and Tourism, during the seven-day National Day holiday, domestic travel increased 5.9% year-on-year, travel spending grew 6.3%, and the number of travelers rose 7.9% compared with the same period in 2019.
Based on these factors, we assess that the economy will continue September's stabilization and recovery trend through the fourth quarter. We're confident in achieving our full-year goals. Thank you.
_ueditor_page_break_tag_
National Business Daily：
We have noticed that the year-on-year increase of the CPI fell back in September compared to August. What are the factors behind this? How does the NBS view the current price level, and what are the predictions for future trends? Thank you.
Sheng Laiyun:
Thanks for your questions. In September, the CPI increased by 0.4% year on year, and maintained the same level month on month. The year-on-year increase dropped by 0.2 percentage point compared with the previous month. The reasons are as follows: First, the month-on-month increase in food prices went down. August witnessed more extreme weather like heatwaves, typhoons and torrential rains, which affected the supply of vegetables and other foods. Food prices in August rose 3.4% month on month, and its month-on-month increase in September was 2.6 percentage points lower than that in the previous month. Second, service prices including flight tickets and tourism costs decreased after the summer holiday, reducing the impact of service prices on the CPI. Third, oil prices dropped. Affected by the fall in international crude oil prices, domestic refined oil prices were also going down. Due to these factors, the increase of the CPI in September slowed down compared to the CPI in August.
Actually, observing CPI trends in our country as well as trends with industrial commodity prices, our country's price formation is still relatively complex, which fully reflects China's vast territory, diverse industrial levels and relatively large differences in structural changes. Generally speaking, prices in the first three quarters showed three characteristics: varying within a small range, rising moderately and diverging significantly.
First, price fluctuations were maintained within a small range. Both the CPI and the PPI showed small fluctuations. Since April, the year-on-year monthly increase of the CPI had been maintained between 0.3% and 0.6%. In the first three quarters, the CPI went up 0.3% year on year, while the PPI continued its downward trend, which showed that the oversupply in the domestic market was still prominent.
Second, prices rose moderately. As the economy recovers and policies to stabilize the economy continues to be implemented, aggregate social demand keeps rising, which is conducive to the moderate growth of the overall prices. The CPI maintained the same level in the first quarter, went up 0.3% in the second quarter and increased 0.5% in the third quarter, registering a quarter-on-quarter increase. The PPI dropped 2.7% in the first quarter, went down 1.6% in the second quarter and decreased 1.8% in the third quarter, showing slower declines overall. This fully indicated that the economy has been recovering. Prices would not rise moderately without a sustained economic recovery.
Third, prices saw different trends. The year-on-year quarterly increase of the CPI continued to climb, while the PPI, although its decrease slowed, still declined. It shows that the price trends were relatively complex. Fluctuations with prices were due to distinct temporal and structural factors. The PPI declines was attributed not only to insufficient demand, but also to structural reasons including imported pressure. As international prices of crude oil and minerals slumped, importing these products would bring down prices in related domestic industries. Additionally, the adjustment of the real estate sector has resulted in lower prices of relative products such as steel, cement and building materials. These demands may hardly return to the previous level, since demands might have been transferred and traditional industries have been cutting overcapacity. Such structural changes might occur at the current stage. Others were indeed due to fluctuations in the market, overall demand and periodic changes. In a word, the change and trend of the PPI demonstrates strong structural characteristics.
The above trends indicate that the economy is recovering. In the next stage, according to our predictions, the price changes will continue to follow the trends in the first three quarters, featuring price fluctuations within a small range, moderate price growth, and slower PPI decline. As the economy continues to improve and overall demand increases, product prices are expected to rise, especially after the introduction of a package of incremental policies. The CPI is also affected by seasonal factors. Some foods will face undersupply when entering winter, but their demand will gradually increase. For example, the consumption of pork will increase during the winter, especially when approaching the New Year and the Spring Festival holidays. Such are changes caused by seasonal factors. With the carry-over effect fading, the CPI would keep growing moderately and the PPI would continue to show narrowing declines in the fourth quarter. Thank you.
_ueditor_page_break_tag_
Nanfang Daily:
This year's graduation season has already passed. Based on employment data, how does the NBS assess the current job market? What policies and measures will be taken to advance high-quality employment? Thank you.
Sheng Laiyun:
Thanks for your questions. Employment is a common concern, directly connected to people's incomes and consumption. The CPC Central Committee attaches great importance to it. Since the beginning of this year, a number of policies have been introduced to stabilize employment, especially for college graduates. Lately, a special document has been issued to boost the high-quality development of employment, and local governments are stepping up efforts to implement it. From our statistics, two features are comparatively obvious.
Employment has been generally stable, although there is pressure on the total volume of employment. Just now, I stated some data on the surveyed unemployment rate, which was sampled survey data conducted by our department. The urban surveyed unemployment rate stood at 5.1% in the first three quarters, specifically, 5.2% in the first quarter, 5% in the second quarter, and 5.2% in the third quarter. Overall, employment remained stable. The data from the third quarter was higher than that in the second quarter due to seasonal factors, such as the graduation season in July and August. What made overall employment maintain stable in our country? There are several reasons. In addition to what I have just said about the high importance attached to employment by Party committees and governments at all levels, we have adopted a series of strong policies to support employment. We also enjoy institutional advantages and benefit from some fundamental factors. As for the latter, I think there are three fundamental factors that support the overall stability of employment in our country.
First, the economy continues to grow. In the third quarter, GDP grew by 4.6%, compared to 4.9% in the same period last year. Although the growth rate fell year on year, the actual GDP increment expanded. For example, this year's third-quarter GDP exceeded last year's by 1.2934 trillion yuan. This substantial GDP growth has driven an increase, rather than a decrease, in overall labor demand - a key economic indicator.
Second, structural transformation is underway. Since the 18th CPC National Congress, China's economic structure evolved continuously. One notable change is the service sector's growing share of GDP. Since 2015, the service sector has accounted for over 50% of GDP, reaching around 55% last year. In the third quarter of this year, the service sector comprised 54.4% of GDP, up 0.4 percentage point from the same period last year. What benefits has the growth of the service sector brought us? It enhances employment flexibility. Since the service industry is mostly labor-intensive, it has a strong capacity to generate jobs. Consequently, this structural transformation has expanded our economy's ability to create employment opportunities.
Third, the demographic structure is changing. Since the 18th CPC National Congress, China's population structure has undergone significant changes. Most notably, the working-age population (ages 16-59) has been declining. From 2013 through last year, this demographic decreased by approximately 5 to 6 million people annually on average, with a net decrease of about 10 million people last year. This trend fundamentally affects overall labor dynamics. With demand increasing and supply decreasing, the overall employment situation has maintained relative stability. This provides inherent support for our national unemployment surveys and overall employment situation. Looking ahead, I believe these demographic factors will continue to play a role. Therefore, while overall employment levels face certain pressures, the foundation for general stability remains robust.
We also confront a pronounced challenge in the form of structural mismatches within our labor market. On the one hand, youth unemployment remains relatively high, creating substantial pressure on that demographic. On the other hand, however, we also observe difficulties in recruitment in the manufacturing sector. Particularly, there is a shortage of skilled workers on the frontline of some manufacturing industries. Thus, structural mismatches represent a defining characteristic of our current labor market. In the future, we need to promote full employment and advance high-quality employment development. We must leverage our strengths to continue driving stable economic development, creating more job opportunities, while gradually addressing structural issues within our development process to ultimately achieve full employment and promote high-quality employment development.
Thank you!
_ueditor_page_break_tag_
CNBC:
I'm wondering, what is the impact of China's trade-in policy on retail sales? Thank you.
Sheng Laiyun:
Thank you for your question. I've already touched on some impacts of the trade-in policy, but let me address retail specifically, as it's indeed a crucial indicator of consumer market trends. Statistics show clear evidence of the policy's effectiveness. Total retail sales of consumer goods grew by 3.2% in September, up 1.1 percentage points from August, with 3.3% growth for the first three quarters. The trade-in policy has played a significant role, especially in September. As I mentioned earlier, following the central government's July announcement of major equipment upgrades and consumer trade-in initiatives, local implementation accelerated through August and September, with the policy effects becoming more pronounced in September. I'd like to highlight several figures for September. The retail sectors benefiting most from the trade-in policy are automobiles, home appliances, office supplies, and home furnishings. Our targeted research shows automobiles and home appliances experienced the broadest benefits, with around 60% of key retailers benefiting. The home furnishing sector saw a more limited impact, with benefits reaching less than 20% of businesses. However, looking at the enterprises that have already benefited, their retail growth rates have been comparatively high. Retail sales for benefiting enterprises in sectors like home appliances grew by over 30% in September. Additionally, auto sales by businesses above a certain scale (each with an annual revenue exceeding 5 million yuan) rose 0.4%, shifting from negative to positive growth. Household appliances and audio-visual equipment achieved their first high growth rate of over 20% this year, with smart home appliances growing by over 30%. Cultural and office supplies registered 10% sales growth, and furniture sales shifted from negative to positive growth. Based on these four categories that benefited most, retail sales by businesses above a certain scale are projected to increase by 1.2 percentage points. The policy's effects are clearly evident. We expect that the swift implementation of related policies will continue to yield positive results.
Thank you!
_ueditor_page_break_tag_
Shou Xiaoli:
Due to time constraints, we only have time for two final questions.
Economic Daily:
The CPC Central Committee has called for accelerating the cultivation of new quality productive forces. Could you please provide an update on the development of new quality productive forces in the first three quarters of this year? Thank you.
Sheng Laiyun:
Thank you for your question. Developing new quality productive forces represents both an inherent requirement and a central focus in promoting high-quality development. Therefore, Party committees and governments at all levels attach great importance to this task and resolutely implement the decisions and deployments of the CPC Central Committee, tailoring the development of new quality productive forces according to local conditions. Our statistical data shows clear evidence of progress, with accelerated development of new quality productive forces.
First, from the perspective of investment in innovation, the investment continues to increase. Last year, China's total research and development (R&D) expenditure exceeded 3.3 trillion yuan for the first time, ranking second in the world, and playing an important role in driving high-tech industries and fostering innovation. This year, a report by the World Intellectual Property Organization (WIPO) showed that China's innovation index ranking has risen by one position, and now stands at 11th. Additionally, from the perspective of high-tech industry investment, investment in high-tech industries increased by 10% year on year in the first three quarters. As we know, fixed asset investment in the first three quarters increased by 3.4%, meaning that investment in high-tech industries was 6.6 percentage points higher. Furthermore, the contribution rate of high-tech industry investment to the overall growth of fixed asset investment reached 27.1%. Therefore, investment in innovation is continuously increasing.
Second, from the perspective of new quality productive forces, innovative outcomes are continuously emerging. In the first eight months of this year, data from intellectual property-related departments indicate that the number of invention patents granted increased by more than 20% year on year. A more advanced quantum computer has been launched, and more space missions have been carried out, along with major national projects and significant achievements continuing to emerge.
Third, new industries are developing at an accelerating pace. The added value of high-tech manufacturing enterprises above designated size increased by 9.1% year on year in the first three quarters, which is 3.3 percentage points higher than the growth rate of industrial enterprises above designated size. The added value of information transmission, software and information technology service industries increased by 11.3% in the first three quarters, which also significantly exceeded the growth rate of the overall service industry. The digital economy is advancing quickly, and the added value of digital product manufacturing is growing fast.
Fourth, new business forms and models are rapidly forming and expanding. Online retail sales continue to experience a high growth rate, with the online retail sales of physical goods increasing by 7.9% year on year in the first three quarters. Instant retail and livestream e-commerce also continue to experience high growth rates.
Based on the above circumstances, new quality productive forces are being rapidly cultivated and formed. However, this process involves a transition from quantitative to qualitative changes. Our country’s economic transformation and high-quality development ultimately depend on technological support and the rapid formation of new quality productive forces. The third plenary session of the 20th CPC Central Committee clearly proposed improving the institutions and mechanisms for fostering new quality productive forces in line with local conditions. A significant portion of the latest incremental policies is aimed at promoting the development of new quality productive forces. Therefore, we believe that with the implementation of these incremental policies and the reforms in place, there is considerable potential for the development of China’s new quality productive forces. Thank you.
_ueditor_page_break_tag_
Shou Xiaoli:
One last question, please.
The Beijing News:
We have noticed that the growth rate of industrial added value in September rebounded for the first time after four months of continuous decline. As such, Mr. Sheng, how do you assess the current performance of the industrial sector? What is your forecast for the trend in the upcoming period? Thank you.
Sheng Laiyun:
Thank you for your question. The industrial sector has been a bright spot in the economy this year. As you may have noted from the data, GDP grew by 4.8% in the first three quarters, while industrial output increased by 5.8%, surpassing GDP growth by 1 percentage point. The industrial sector has been crucial in supporting steady economic growth, contributing nearly 40% of GDP in the first three quarters. Why has the industrial sector performed so well and become a highlight of the economy?
First, the foundation of China’s industrial sector is solid. China is the only country that covers all of the more than 500 industrial sectors recognized by the United Nations. Our industrial system is highly resilient, with strong supporting capabilities and significant flexibility. Despite external shocks and internal pressures from structural adjustments, the industrial sector has continued to demonstrate strong competitiveness.
Second, the solid performance of the industrial sector is also attributable to the support from exports. In the first three quarters of this year, the export delivery value of the industrial sector increased by 4.1%, while total goods exports rose by 6.2%. These export products have not only showcased China’s processing capabilities but also underscored the vital role that exports play in supporting industrial development.
Third, the growth of new drivers and the development of new quality productive forces, as I mentioned earlier, have also provided crucial support. In recent years, particularly since the 18th CPC National Congress, we have intensified efforts to promote industrial restructuring and transformation, accelerating the development of new quality productive forces within the industrial sector. Our data indicates that the trend toward industrial upgrading, encompassing high-end, intelligent and green development, has become increasingly evident. Over the past few years, the added value of high-tech industries has increased by 3 to 4 percentage points faster than that of industrial enterprises above designated size on average. Additionally, industries related to the digital economy, as well as the new energy sectors in which we have competitive advantages, have also sustained rapid growth, providing strong momentum for the stable development of the industrial sector.
Another important reason, as I mentioned earlier, is the adoption of the policy to issue ultra-long special treasury bonds to implement major national strategies and build up security capacity in key areas and the policy to promote large-scale equipment upgrades and trade-ins for consumer goods. Earlier, I provided an overview of the policy effects, noting that the new energy vehicle (NEV) sector has benefited significantly. In the first three quarters, NEV production increased by 33.8% year on year. Related manufacturing sectors, such as metal smelting equipment and CNC forging and pressing equipment, have also sustained double-digit growth in output. These policy effects continue to be realized.
These four factors have contributed to the robust performance of the industrial economy this year, playing a crucial role in ensuring the stable operation of the overall economy. Looking ahead to the next stage, the industrial sector faces certain pressures, such as ongoing declines in industrial product prices, the need to improve corporate profits, the necessity to enhance industrial capacity utilization, and the trend for some traditional industries to accelerate adjustment, transformation and upgrading, all structural issues to be addressed through reform and transformation.
However, from a broader perspective, I believe the industrial sector will continue to sustain stable growth momentum. The supporting factors I mentioned earlier remain in place, and internal drivers, such as new growth engines and economic transformation, are expected to strengthen further. Especially in the fourth quarter, as the package of policies is implemented, China’s industrial economy is anticipated to maintain stable growth, making improvements in both quality and efficiency. Thank you.
Shou Xiaoli:
Thank you to Mr. Sheng and all the reporters for your participation. That concludes today's press conference. Goodbye.
Translated and edited by Yan Bin, Li Huiru, Mi Xingang, Wang Yanfang, Wang Yiming, Zhou Jing, Wang Xingguang, Wang Qian, Lin Liyao, Wang Wei, Chen Xinyan, Zhang Junmian, Liu Caiyi, Yuan Fang, David Ball, Rochelle Beiersdorfer, and Jay Birbeck. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.
