Read in Chinese
Speakers:
Mr. Fu Linghui, spokesperson of the National Bureau of Statistics (NBS) and director general of the Department of Comprehensive Statistics of the NBS
Chairperson:
Ms. Shou Xiaoli, director general of the Press Bureau of the State Council Information Office (SCIO) and spokesperson of the SCIO
Date:
March 17, 2025
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. Fu Linghui, spokesperson of the National Bureau of Statistics (NBS) and director general of the Department of Comprehensive Statistics of the NBS, to brief you on China's economic performance in the first two months of 2025 and answer your questions.
Now, I'll give the floor to Mr. Fu for his introduction.
Fu Linghui:
Good morning, everyone. As usual, I will start by briefing you on the main economic indicators in the first two months of 2025 and then answer your questions.
In the first two months, the national economy started off smoothly, with development trends moving in a new and positive direction.
In January and February, under the strong leadership of the Central Committee of the Communist Party of China (CPC) with Comrade Xi Jinping at its core, all regions and departments thoroughly implemented the decisions and arrangements made by the CPC Central Committee and the State Council, adhered to the general principle of pursuing progress while ensuring stability, fully and faithfully applied the new development philosophy on all fronts, accelerated efforts to create a new pattern of development and took solid steps to promote high-quality development. As a result, a package of existing policies and incremental policies continued to take effect, industrial and service sectors grew rapidly, consumption and investment continued to improve, employment was generally stable, and new quality productive forces grew and thrived. The national economy got off to a steady start with new and positive development momentum.
First, industrial production grew rapidly, with accelerated growth in equipment manufacturing and high-tech manufacturing.
The total value added of industrial enterprises above designated size grew by 5.9% year on year in the first two months, 0.1 percentage point faster than that of 2024. In terms of sectors, the value added of mining went up by 4.3% year on year, manufacturing up by 6.9%, and the production and supply of electricity, thermal power, gas and water up by 1.1%. The value added of equipment manufacturing increased by 10.6% year on year, 2.9 percentage points faster than that of 2024; and the value added of high-tech manufacturing increased by 9.1%, which was 0.2 percentage point faster. In terms of ownership, the value added of state holding enterprises was up by 3.7% year on year; that of share-holding enterprises was up by 6.6%; that of enterprises funded by foreign investors or investors from Hong Kong, Macao and Taiwan was up by 3.2 %; and that of private enterprises was up by 6.7%. In terms of products, the production of new energy vehicles (NEVs), 3D printing devices and industrial robots grew by 47.7%, 30.2% and 27%, respectively. In February, the total value added of industrial enterprises above designated size went up by 0.51% month on month. In February, the Manufacturing Purchasing Managers' Index (PMI) stood at 50.2%, 1.1 percentage points higher than the previous month; and the Production and Operation Expectation Index was 54.5%.
Second, the service sector witnessed a good growth momentum and modern services grew rapidly.
In the first two months, the Services Production Index grew by 5.6% year on year, 0.4 percentage point faster than that of 2024. Specifically, the Services Production Index of information transmission, software and IT services grew by 9.3%, leasing and business services grew by 8.8%, wholesale and retail grew by 5.6%, and finance grew by 5.5% year on year. In February, the Business Activity Index for Services was 50%, and the Business Activity Expectation Index for Services was 56.9%. Specifically, the Business Activity Index for industries like air transportation, postal services, telecommunication, broadcast, television and satellite transmission services, monetary and financial services and capital market services all stayed within the high expansion range of 55% and above.
Third, the growth of market sales accelerated and trade-in goods showed good sales.
In the first two months, the total retail sales of consumer goods reached 8,373.1 billion yuan ($1,152.9 billion), up by 4% year on year, 0.5 percentage point faster than that of 2024. Analyzed by different areas, the retail sales of consumer goods in urban areas reached 7,246.2 billion yuan, up by 3.8%; and that in rural areas reached 1,126.9 billion yuan, up by 4.6%. Grouped by consumption patterns, the retail sales of goods were 7,393.9 billion yuan, up by 3.9%; and the income of catering was 979.2 billion yuan, up by 4.3%. Sales of basic living goods and certain upgraded goods achieved sound growth. The retail sales of grain, oil and food and of sports and recreational articles by enterprises above designated size went up by 11.5% and 25%, respectively. The effect of consumer goods trade-in policies continued to manifest, with the retail sales by enterprises above designated size of communication equipment growing by 26.2%, cultural and office supplies by 21.8%, furniture by 11.7%, and household appliances and audio-visual equipment by 10.9%. Online retail sales reached 2,276.3 billion yuan, up by 7.3% year on year. Specifically, the online retail sales of physical goods were 1,863.3 billion yuan, up by 5%, accounting for 22.3% of the total retail sales of consumer goods. In February, the total retail sales of consumer goods grew by 0.35% compared with the previous month. In the first two months, the retail sales of services grew by 4.9% year on year.
Fourth, growth of investment in fixed assets picked up and investment in manufacturing and high-tech industries grew quickly.
In the first two months, the investment in fixed assets (excluding rural households) reached 5,261.9 billion yuan, up by 4.1% year on year, 0.9 percentage point faster than that of 2024; and the investment in fixed assets was up by 8.4% with investment in real estate development deducted. Specifically, investment in infrastructure grew by 5.6% year on year, that in manufacturing grew by 9%, and that in real estate development declined by 9.8%. The floor space of newly-built commercial buildings sold was 107.46 million square meters, down by 5.1% year on year, with the decline narrowing by 7.8 percentage points compared with that of 2024; and the total sales of newly-built commercial buildings were 1,025.9 billion yuan, down by 2.6%, with the decline narrowing by 14.5 percentage points. By industry, investment in the primary industry increased by 12.2% year on year, that in the secondary industry was up by 11.4%, and that in the tertiary industry was up by 0.7%. Private investment maintained the same level year on year, or increased by 6% with the investment in real estate development deducted. Investment in high-tech industries increased by 9.7% year on year. Specifically, the investment in information services grew by 66.4%, e-commerce services by 31.9%, computer and office device manufacturing by 31.6%, and aerospace vehicle equipment manufacturing by 27.1%. In February, the investment in fixed assets (excluding rural households) increased by 0.49% compared with the previous month.
Fifth, imports and exports of goods were generally stable, and the trade structure continued to improve.
In the first two months, the total value of imports and exports of goods reached 6.5364 trillion yuan, down 1.2% year on year. Of this, exports totaled 3.8812 trillion yuan, up 3.4%; imports amounted to 2.6551 trillion yuan, down 7.3%. Imports and exports by private enterprises rose 2%, accounting for 56.4% of the total value of imports and exports. This share was 1.8 percentage points higher than that in the same period last year. Exports of mechanical and electrical products grew 5.4%, accounting for 60% of the total export value.
Sixth, employment was generally stable, and the surveyed urban unemployment rate remained steady.
In the first two months, the country's surveyed urban unemployment rate averaged 5.3%. In February, the surveyed urban unemployment rate was 5.4%, up 0.2 percentage points from the previous month. The surveyed unemployment rate for the population with local household registration was 5.6%, and for those with non-local registration, it was 5%. The rate for people with non-local agricultural household registration was 5.1%. The surveyed urban unemployment rate in 31 major cities was 5.2%. On average, employees of enterprises worked 47.1 hours per week.
Seventh, consumer prices fell year on year, and the decline in producer prices narrowed.
In the first two months, the consumer price index (CPI) receded 0.1% year on year. Specifically, it rose 0.5% in January and dropped 0.7% in February. Grouped by commodity categories, in the first two months, prices for food, tobacco and alcohol fell 0.9% year on year; clothing rose 1.1%; housing increased 0.1%; articles and services for daily use decreased 0.9%; transportation and communication dropped 1.6%; education, culture and recreation rose 0.6%; medical services and health care increased 0.4%; and other articles and services rose 5.9%. Among the prices for food, tobacco and alcohol, fresh vegetable prices fell 5.5%, grain prices dropped 1.4%, fresh fruit prices decreased 0.6%, and pork prices rose 8.8%. The core CPI, excluding food and energy prices, rose 0.3% year on year. In January and February, the CPI rose 0.7% and fell 0.2% month to month, respectively.
In the first two months, the national producer prices fell 2.2% year on year. In January, producer prices fell 2.3% year on year and 0.2% month on month. In February, they dropped 2.2% year on year, narrowing the decline by 0.1 percentage point compared with the previous month, and fell 0.1% month on month. In the first two months, the purchasing prices for industrial producers fell 2.3% year on year.
Generally speaking, in the first two months, as various macro policies continued to take effect, the national economy maintained its new and positive momentum, and the quality of development steadily improved. However, we should be aware that the external environment is increasingly complex and severe, domestic effective demand is weak, some enterprises face difficulties in production and operation, and the foundation for sustained economic recovery and growth is not strong enough. In the next stage, we must follow the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, fully implement the spirit of the Central Economic Work Conference and the "two sessions" , adhere to the general principle of pursuing progress while ensuring stability, fully and faithfully apply the new development philosophy on all fronts, move faster to create a new pattern of development, and make solid progress in high-quality development. We must implement more proactive and effective macro policies, stimulate domestic demand across the board, further deepen reform and opening up, make every effort to strengthen growth drivers, boost economic vitality, and improve expectations to promote sustained economic recovery and growth. Thank you.
Shou Xiaoli:
Thank you, Mr. Fu. The floor is now open for questions.
CCTV:
How would you evaluate the performance of China's economy in the first two months, and what are the overall highlights and positive changes? Thank you.
Fu Linghui:
Thank you for your questions. Since the beginning of this year, with the gradual implementation of more proactive fiscal policies and moderately accommodative monetary policies, the synergistic effects of existing and incremental policies have been continuously enhanced. In the first two months, production and supply grew steadily, demand expanded gradually, the employment situation remained generally stable, and new drivers of development strengthened progressively. The overall economic operation has been stable and has shown progress, continuing the improving trend. The characteristics of economic performance in the first two months can be summarized in two points: first, the economy got off to a stable start; second, the development trend is shifting toward new and positive improvements.
The stable start to economic performance primarily refers to the economy continuing the recovery trend that began in the fourth quarter of last year. It maintained overall stability in the face of growing external pressures. This is primarily reflected in stable production growth, gradual expansion of demand and an overall stable employment situation. From the perspective of production, new-type industrialization has steadily advanced. The combined effects of macro policies are increasingly evident in driving industrial growth, resulting in relatively rapid industrial production. In the first two months, the value-added of industrial enterprises above designated size rose 5.9% year on year, accelerating 0.1 percentage point compared with last year. Among them, the value-added of the equipment manufacturing sector increased 10.6% year on year, significantly supporting overall industrial growth. With the continued deepening of digital transformation and the active holiday economy during the Spring Festival, growth was driven in information technology, tourism and transportation-related industries, while the service sector showed strong growth momentum. In the first two months, the production index of the service industry rose 5.6% year on year, accelerating by 0.4 percentage points compared with the previous year. Within this group, the production indices of the information transmission, software and IT services industry, as well as the leasing and business services industry, rose 9.3% and 8.8% year on year, respectively. From a demand perspective, consumer goods trade-in policies were intensified and expanded. During the Spring Festival, the markets for tourism, culture and sports were booming, driving a rebound in market sales and an expansion in service consumption. The total retail sales of consumer goods in January and February rose 4% year on year, accelerating 0.5 percentage points from the previous year. During the Spring Festival, domestic tourist trips rose 5.9% year on year. In January and February, the transaction volume of tourism services on digital platforms increased by more than 20%. The 2024-2025 snow season saw national ski resorts receiving a cumulative 22.8% increase in visitors year on year. Meanwhile, domestic animated film "Ne Zha 2" broke multiple box office records. With the enhancement of policies for basic livelihood infrastructure construction and large-scale equipment renewal, manufacturing investment and infrastructure investment grew rapidly, driving a rebound in overall investment growth. In the first two months, fixed asset investment (excluding rural households) rose 4.1% year on year, accelerating 0.9 percentage points from the previous year. Among these, infrastructure investment rose 5.6%, accelerating by 1.2 percentage points from the previous year, while manufacturing investment grew 9%, significantly outpacing the growth of total investment. From an employment perspective, despite fluctuations in the monthly surveyed urban unemployment rate due to the Spring Festival, the overall employment situation has remained generally stable. In the first quarter, the national average surveyed urban unemployment rate was 5.3%, essentially unchanged from the previous year.
The new and positive development momentum is reflected in the steady development of new quality productive forces, the ongoing impact of macroeconomic policies, and enhanced market expectations and confidence. With regard to new quality productive forces, various sectors are intensifying their efforts to promote the integrated development of scientific and technological innovation and industrial innovation. They are actively driving the development of the green and low-carbon economy, which has led to the rapid emergence of new growth drivers and the flourishing of green industries. The value added of high-tech manufacturing enterprises above designated size increased 9.1% year on year in January and February, while NEV output rose 47.7%. These growth rates are particularly notable as they build upon the relatively high base established last year. Regarding policy effectiveness, measures supporting major national strategies, enhancing security capacity in key areas, and promoting large-scale equipment renewal and consumer goods trade-ins have continued to stimulate production and demand since the beginning of this year. The output of excavating and shoveling transportation machinery, household refrigerators, and household washing machines achieved double-digit growth from January to February. Similarly, retail sales of household appliances, audiovisual equipment, furniture, office supplies, and communication equipment by enterprises above designated size sustained double-digit growth during the same period. Regarding market expectations, macroeconomic policies have become more proactive and effective, with new breakthroughs achieved in emerging fields such as AI. Notably, General Secretary Xi Jinping's important speech at the symposium on private enterprises has significantly bolstered development confidence among private enterprises and across society. In February, the manufacturing PMI stood at 50.2%, up 1.1 percentage points from the previous month, while the non-manufacturing business activity index reached 50.4%, an increase of 0.2 percentage points.
Overall, the economy performed stably in January and February, with key indicators showing steady growth, new growth drivers being cultivated and strengthened, and development quality steadily improving. These outcomes were achieved against the backdrop of increasing external challenges and a high base of comparison from the same period last year. Attaining these results was no small feat, underscoring the impressive resilience of the Chinese economy. However, it should also be noted that the external environment is growing increasingly complex and severe, characterized by numerous unstable and uncertain factors. Additionally, domestic demand remains weak, and many companies continue encountering challenges in their production and operations. Moving forward, we will earnestly implement the guiding principles from the Central Economic Work Conference and the annual "two sessions." We will adopt more proactive and effective macroeconomic policies, expand domestic demand across all sectors, accelerate innovation-driven development, enhance reform and opening up, and promote sustained economic recovery and growth. These efforts aim to effectively safeguard and improve people's livelihoods. Thank you.
Jinan Times APP:
The government work report has set this year's economic growth target at around 5%. What favorable factors will help achieve this objective, given current economic conditions? Thank you.
Fu Linghui:
Thank you for your question. This year's government work report sets a target of around 5% for economic growth. This target was established after considering evolving domestic and international dynamics, as well as other relevant factors, balancing both necessity and feasibility. The economic performance so far this year indicates that the combined macroeconomic policies are taking effect, reform and opening up has deepened, and expectations and confidence have been boosted. This has created a solid foundation for achieving the annual economic growth target. Looking ahead, the Chinese economy is well-positioned with numerous favorable conditions to maintain stable and healthy growth.
First, China possesses a solid industrial foundation, which is complemented by the increasing influence of new growth drivers. China's industrial sector covers all categories listed in the United Nations Industrial Classification, featuring a complete industrial system and robust supporting capabilities. Its manufacturing scale has led globally for 15 consecutive years, with "Made in China" products meeting both domestic and global demands. In recent years, China has pursued innovation-driven development, intensified efforts to achieve breakthroughs in core technologies within key fields, and cultivated new quality productive forces tailored to local conditions. Traditional industries are undergoing upgrades, emerging industries are expanding, and future-oriented industries are developing rapidly. Consequently, new growth drivers are taking shape at an accelerated pace. In the services sector, the integrated development of advanced manufacturing and producer services has gathered momentum. Policies aimed at improving people's livelihoods have created favorable conditions for the growth of the life services sector. Meanwhile, advancements in the AI industry are fueling growth in related industries and opening up new opportunities for sector upgrades.
Second, there is ample market demand, providing a solid foundation for unleashing both consumer and investment potential. The market stands as the most precious resource. China, with its population of over 1.4 billion and a per capita GDP surpassing $13,000, boasts a market of immense potential and breadth, holding within it vast opportunities for development. The growth in residents' consumption capacity and the rapid pace of consumption upgrading are fueling the expansion of new consumption forms, including green and digital consumption, as well as service sectors like elderly care and child care. These developments will emerge as key drivers propelling consumption growth forward. There is vast investment potential in fields such as new industrialization, new-type urbanization, and energy conservation and carbon reduction retrofits. Additionally, substantial investment demand exists in areas concerning people's livelihoods, including basic public services and government-subsidized housing. By fully leveraging these favorable conditions and systematically unleashing the potential of domestic demand, we will be able to facilitate economic circulation.
Third, advancing reform and opening up in all respects will further stimulate development potential and momentum. Reform and opening up is the driving force for Chinese development, serving as a crucial tool for rapidly keeping pace with the times. The third plenary session of the 20th CPC Central Committee proposed more than 300 important reform measures. As reforms in related fields are gradually implemented, these efforts are beginning to yield results in key areas and at crucial points. This progress will help overcome deep-seated institutional and systemic barriers, ensuring the market plays a decisive role in resource allocation. The goal is to create a first-class business environment that is market-oriented, law-based, and internationalized, fostering better interplay between an efficient market and a well-functioning government. This will further unleash and develop productive forces, stimulate economic vitality and enhance momentum.
Fourth, macroeconomic policies are yielding positive results, ensuring a steady economic recovery. A meeting of the Political Bureau of the CPC Central Committee on Sept. 26 last year decisively deployed a package of incremental policies, effectively boosting confidence, stimulating market vitality, promoting economic recovery and achieving remarkable results. Since the beginning of this year, all sectors have diligently implemented the spirit of the Central Economic Work Conference and adopted more proactive and effective macroeconomic policies, which help enhance momentum, stimulate vitality, stabilize expectations, and promote stable and healthy economic development.
It is also important to recognize that this year is the culmination of the 14th Five-Year Plan. Consequently, all stakeholders will focus on completing key tasks, redoubling their efforts, and offering enhanced support to drive stable economic growth. It should be noted that achieving China's GDP growth target, which is around 5%, is by no means easy and requires diligent efforts. Moving forward, we must conscientiously implement the decisions and deployments of the CPC Central Committee, seize the opportunities for economic recovery and growth, intensify the implementation of various macroeconomic policies, comprehensively deepen reform, further open up to the world, and vigorously foster new quality productive forces. We will strive to make significant progress in achieving high-quality development and complete the goals regarding this year's economic and social development, thereby laying a solid foundation for the successful completion of the 14th Five-Year Plan and a strong start to the 15th Five-Year Plan. Thank you.
Bloomberg:
We observed that industrial output growth is lower than in December last year. Do you think it is caused by the risk of increased U.S. tariffs? Thank you.
Fu Linghui:
Thank you for your question. Since the beginning of this year, policies aimed at vigorously advancing new industrialization, expanding and strengthening advanced manufacturing, and promoting the renewal and upgrading of traditional industries have contributed to relatively rapid growth in the equipment manufacturing and high-tech manufacturing sectors. New industrial momentum has been cultivated and strengthened, business expectations have improved, and overall industrial production has maintained stable and rapid growth.
First, industrial production continues to grow. All localities have stepped up their support for industrial production and strengthened the supply of essential resources, thereby creating conducive conditions for industrial development. In the first two months, the value added by industries above designated size increased by 5.9% year on year, accelerating by 0.1 percentage point compared to the whole of last year. The manufacturing sector experienced a growth rate of 6.9%, significantly faster than the growth rate of total industrial value added. Among these, the equipment manufacturing sector grew by 10.6%, accelerating by 2.9 percentage points compared to the whole of last year, thus providing strong support for the steady and rapid growth of industrial production. This industrial growth rate was achieved despite a high growth rate in January-February of last year, which also reflects the strong resilience of China's industrial sector.
Second, the trend towards high-end and intelligent development in industry is becoming increasingly evident. As technological innovation and industrial innovation continue to converge at an accelerated pace, advanced technologies like information technology and AI are driving industrial transformation and emerging as key drivers of industrial growth. In the first two months, the value added of high-tech manufacturing increased by 9.1% year on year, accelerating by 0.2 percentage points compared to the whole of last year. From a product perspective, the output of industrial robots and integrated circuit wafers increased by 27% and 19.6%, respectively, in January and February. The widespread adoption of domestic AI-driven large models in key industrial sectors like electronics and automobiles is accelerating, driving innovation and development across industries. The surge in computing demand is fueling the rapid growth of related industries. In the first two months, the value added of digital product manufacturing rose by 9.1%, while server output skyrocketed by 73%.
Third, industries are making progress in green development. New energy industries have demonstrated strong growth momentum, and the use of green energy is increasing, which provides a significant boost to the economic transition towards green and low-carbon development. From January to February, the output of NEVs and lithium-ion batteries for automobiles increased by 47.7% and 37.5% year on year, respectively, sustaining a high growth rate. Additionally, industrial enterprises above designated size maintained double-digit growth in wind and solar power generation.
Fourth, business expectations have improved. Since the beginning of this year, macroeconomic policies have become more proactive. Breakthroughs have been achieved in the application of technologies like AI, which have helped improve business expectations. In February, the manufacturing PMI stood at 50.2%, up 1.1 percentage points from the previous month. The new orders index for the manufacturing sector was 51.1%, increasing by 1.9 percentage points.
Overall, industrial production has maintained relatively fast and stable growth this year, manifesting new and positive momentums. However, we should also recognize that structural imbalances in market supply and demand remain, prices in certain industries are low, and some enterprises underachieve. Looking ahead, we need to implement various measures to expand domestic demand across all aspects, promote the integrated development of technological and industrial innovation, enhance business operations, and drive high-quality industrial development. Thank you.
21st Century Business Herald:
How do you assess the performance of the real estate market from January to February, and what positive changes have been observed? Thank you.
Fu Linghui:
Thank you for your questions. Since the beginning of this year, thanks to effective policies, the real estate market has maintained general stability. Overall transactions and new home sales have been stable, while second-hand home transactions have been relatively brisk. Housing prices in first-tier cities have begun to recover. Market expectations are generally stable, and the real estate market has continued to stabilize since the fourth quarter of last year.
First, market transactions have generally remained stable. As real estate market policies were optimized and adjusted, and residents' demand for essential and upgraded housing was gradually releasing, property transactions began to improve from the fourth quarter of last year. In January and February of this year, overall market transactions remained stable. During this two-month period, the year-on-year decline in the area and amount of new commercial housing sales narrowed by 7.8 and 14.5 percentage points, respectively, compared with the full-year figures of last year, while in 40 key monitored cities, the area and amount of new commercial housing sales rose 1.3% and 7.1% year on year, respectively.
Second, housing prices continued to stabilize. In February, stabilizing policies to cease market decline took effect, and as the result, among 70 large- and medium-sized cities, the sales prices of new commercial residential buildings in first-tier cities continued to rise month on month. Meanwhile, the year-on-year decline in sales prices for both new and second-hand residential buildings in first-, second- and third-tier cities continued to narrow. Regarding the sales prices of new commercial residential buildings, the year-on-year decline in first-tier cities narrowed by 0.4 percentage point compared with the previous month. The year-on-year decline in second- and third-tier cities narrowed by 0.3 and 0.1 percentage points, respectively, compared with the previous month. Regarding the sales prices of second-hand residential buildings, the year-on-year decline in first-tier cities narrowed by 0.7 percentage point compared with the previous month, while the year-on-year decline in second- and third-tier cities both narrowed by 0.2 percentage point.
Third, market expectations remained stable. A survey of real estate business entities shows that in February, among developers and intermediary institutions in 70 large- and medium-sized cities, 71.8% of surveyed employees expected new commercial residential building sales prices to remain stable or rise over the next six months, up 2.8 percentage points from the previous month. This suggests a generally stable outlook among market institutions.
Fourth, real estate development companies have seen operational improvements. As real estate sales in first- and second-tier cities showed a positive trend of halting declines and stabilizing, the sales stability contributed to improvements in enterprise operational development and helped generating liquidity. In the first two months, the year-on-year decline in real estate development investment narrowed by 0.8 percentage point compared with the whole year of 2024. In particular, residential investment saw its decline narrow by 1.3 percentage points, while the decline in funds available to real estate enterprises narrowed by 13.4 percentage points than full-year 2024.
Overall, the real estate market has remained generally stable this year and continues to show signs of halting its decline and stabilizing. However, we should also realize that the real estate market in some regions is still undergoing adjustments, and there are still pressures on stabilizing the market. In the next stage, we must thoroughly implement the decisions and arrangements made by the CPC Central Committee and the State Council. We should adopt city-specific policies, adjust and reduce restrictions, and intensify efforts to renovate urban villages and dilapidated housing, thereby fully unleashing the potential demand for basic and improved housing. We must also improve the housing system by diversifying suppliers and channels of support and by attaching equal importance to home purchases and rentals. Furthermore, efforts should be made to accelerate the establishment of a new model for real estate development and to promote the stable and healthy development of the real estate market. Thank you.
Yicai:
We have noticed that the CPI in February started to decrease year on year and month on month. What is the reason behind this? In addition, what is your view on the future trend of prices? Thank you.
Fu Linghui:
Thank you for your questions; price trends are of great concern to everyone. According to historical data, the Spring Festival has a significant impact on the CPI in January and February, especially when it falls in different months in two consecutive years, which can cause both year-on-year and month-on-month fluctuations. This is primarily due to the surge in purchases of goods and spending on services before and during the Spring Festival that drive up prices. After the Spring Festival, prices often decline as demand subsides. For instance, prior to the Spring Festival, it's common to see price hikes in food and transportation. However, once the holiday period ends and demand drops off, prices naturally decline. The Spring Festival falls in either January or February each year. When it falls in different months in two consecutive years, it typically causes noticeable fluctuations in the CPI.
In January this year, the CPI rose 0.5% year on year, a significant increase compared to the previous month due to the influence of the Spring Festival. In February, due to the shift in the timing of the Spring Festival, there was a year-on-year decrease of 0.7% in the CPI. This year, the Spring Festival fell in January, while last year, it was in February. After adjusting for the shift in the Spring Festival, February's CPI actually increased 0.1% year on year. It's also worth noting that the year-on-year decline in fresh vegetable prices and automobile discounts in February reduced the CPI growth rate. Due to a high base in the same period last year, when devastating snowstorms in some areas caused vegetable prices to surge, fresh vegetable prices in February this year fell 12.6% year on year, reducing the CPI by about 0.31 percentage point. In February, gasoline and new energy vehicle prices fell by 5% and 6%, respectively, collectively lowering the CPI by approximately 0.16 percentage point year on year. Overall, the CPI's moderate upward trend remains unchanged.
From the perspective of the CPI structure, as market demand improved, prices for some goods and services in February saw steady increases. In February, the prices of industrial consumer goods excluding energy rose 0.2% year on year. Among these, prices for cultural and entertainment durable goods, clothing, communication devices, and small household appliances increased by 1% to 1.6%. Certain service sector prices showed steady growth in February, with housekeeping services prices rising 2.6% year on year and dining-out prices increasing 1.2%. These trends reflected the impact of improved market demand on prices.
Looking ahead, China's supply of industrial and agricultural consumer goods remains ample, and the overall service supply is stable, providing a solid foundation for maintaining price stability. As the economy continues to recover and grow, market demand is expected to expand further. The overall price situation is expected to gradually improve due to efforts to promote income growth through multiple channels, increase high-quality goods supply, improve the consumption environment and enhance consumer goods trade-in programs. Thank you.
Market News International:
In January-February, export and import year-over-year growth slowed from December. What is your interpretation of this data? And, what is the outlook for trade in the coming months given rising trade tensions? Thank you.
Fu Linghui:
Thank you for your questions. Indeed, given the complex and volatile international landscape, developments in foreign trade have drawn a lot of attention. Since the start of this year, global economic recovery has been sluggish, and trade restrictions have grown tighter, presenting mounting challenges to economic and trade growth worldwide. Amid the complicated external environment, China's imports and exports dipped marginally, influenced in part by a lower number of working days relative to the previous year. However, after adjusting for incomparable factors, our imports and exports maintained stable growth. In the first two months of the year, China's total imports and exports of goods fell by 1.2% year on year. However, according to the customs authorities, after adjusting for incomparable factors, imports and exports actually increased by 1.7%. Specifically, exports continued to grow, especially for key products such as machinery and electronics. This growth demonstrates the strong international competitiveness and resilience of China's foreign trade in a complex and challenging global environment. This is evident in several aspects.
First, from the perspective of major trading partners, imports and exports to the Association of Southeast Asian Nations (ASEAN) and the United States continued to grow. In recent years, as the Regional Comprehensive Economic Partnership (RCEP) has been further implemented, trade between China and ASEAN countries has maintained good momentum. This year, China-ASEAN trade continued to grow, with bilateral trade increasing by 4% year on year in the first two months. Despite higher tariffs and other constraints, the complementary nature of China-U.S. trade has remained evident, with trade in goods continuing to grow. In the first two months of the year, bilateral trade increased by 3.5% year on year.
Second, in terms of trade entities, imports and exports by private enterprises continued to grow. In recent years, private enterprises have actively expanded into international markets, playing a crucial role in driving foreign trade growth. Looking at this year's situation, private enterprises have actively responded and adjusted to the complex changes in the international market. They have taken the initiative to explore new areas of foreign trade, and the effects are becoming evident. In the first two months, private enterprises saw their imports and exports rise 2% year on year, outperforming the broader foreign trade sector.
Third, in terms of commodities, exports of mechanical and electrical products experienced strong growth. With ongoing industrial upgrading in China, mechanical and electrical products have become increasingly competitive, fueling sustained export growth in sectors such as integrated circuits and automobiles. In the first two months of the year, China's exports of mechanical and electrical products grew 5.4% year on year. Within this category, exports of automatic data processing equipment and components rose 11.7%, integrated circuits 13.2% and automobiles 3.7%.
Looking ahead, China's foundation for large-scale foreign trade remains solid, as it maintains its position as the world's largest trader of goods and second-largest in services trade. With diverse and stable economic and trade relations, China has become a major trading partner for more than 150 countries, creating ample opportunities for foreign trade development. Moreover, China boasts a complete industrial system and strong supporting capabilities. As a result, "Made in China" products are gaining increasing global recognition. Meanwhile, foreign trade enterprises are actively participating in the international division of labor and cooperation. Additionally, new growth drivers, such as green trade and digital trade, are constantly emerging. Collectively, these factors will support China's foreign trade development.
In the next stage, although the international environment has become more complex and severe, the trajectory of mutually beneficial cooperation will not change. China's firm commitment to opening up wider to the world will not change. It has a complete industrial system, its innovation capability continues to grow, and there is a foundation and conditions for the steady development of foreign trade, which will also create new opportunities for global economic and trade development. Thank you.
China Business News:
How do you evaluate the growth rate of manufacturing investment in the first two months of this year? What has been the effect of the large-scale equipment renewal policy? And how do you see the trend in the growth rate of the manufacturing investment in the next stage? Thank you.
Fu Linghui:
Thank you for your questions. The development of the manufacturing sector is of great interest to everyone. Since the beginning of this year, with the continuous promotion of the high-end, intelligent and green manufacturing industry, the effect of large-scale equipment renewal policy has emerged, while manufacturing investment has maintained rapid growth, notably driving for the growth of total investment. In the first two months, investment in the manufacturing industry increased by 9% year on year, maintaining relatively fast growth. The main features are as follows:
First, the composition of investment continued to be optimized, and investment in equipment manufacturing grew rapidly. As the manufacturing industry improves and develops, the demand for equipment products expands, driving the growth of industry investment. In the first two months, investment in equipment manufacturing increased by 8.9% year on year. Among this, investment in railway, ship, aerospace and other transportation equipment manufacturing, and investment in general equipment manufacturing increased by 37.3% and 21.6%, respectively, both significantly faster than the growth rate of investment in the entire manufacturing industry.
Second, solid progress was made in transformation and upgrading, and investment in technological transformation of the manufacturing industry grew rapidly. Efforts to transform and upgrade traditional industries have been intensified, and investment in technological transformation in the manufacturing industry has shown good growth momentum. In the first two months, investment in technological transformation of manufacturing industry increased by 10% year on year, and the growth rate was 2 percentage points faster than that of the whole of last year.
Third, the manufacturing sector developed in a high-end manner, and investment in the high-tech manufacturing industry increased. All sectors have fostered and strengthened new quality productive forces, increased investment in scientific and technological innovation, and investment in high-tech manufacturing grew rapidly. In the first two months, investment in aerospace vehicle and equipment manufacturing increased by 27.1% year on year, and investment in computer and office equipment manufacturing increased by 31.6%.
It is also worth noting that since the beginning of this year, the large-scale equipment renewal policy has been vigorously promoted, which has not only promoted manufacturing production, but also strongly supported investment growth. In the first two months, investment in the purchasing of equipment, tools and implements increased by 18% year on year, 2.3 percentage points faster than that of the previous year, and its contribution to total investment growth reached 62.3%.
In the next stage, China's manufacturing industry has more potential for further development, and there are many favorable factors for the sustained growth of manufacturing investment. First, the industrial upgrading is accelerating. The country is accelerating its progress toward becoming a manufacturing powerhouse, and the manufacturing industry is developing in a high-end, intelligent and green direction with strong momentum. We need to further increase investment to accelerate the cultivation of new quality productive forces, promote the transformation and upgrading of traditional industries, vigorously develop emerging industries and plan for industries of the future. Second, breakthroughs in scientific and technological innovation are leading development. In recent years, China has made breakthroughs in such fields as large-scale AI models, humanoid robots, quantum communications and semiconductors. Innovative products and applications such as AI Plus have been accelerated, driving a surge in demand for related products and effectively boosting investment growth in related industries. Third, policy support is playing an obvious role. The Central Economic Work Conference and the national "two sessions" made comprehensive deployments regarding the expansion of effective investment, and all localities have made efforts to implement major national projects and programs, including those aligned with major national strategies, building up security capacity in key areas, as well as the large-scale renewal of equipment and the trade-in of consumer goods, and have strengthened the guarantee of projects, funds and other elements, which will strongly support the growth of manufacturing investment.
In the next stage, we must fully implement the guiding principles of the Central Economic Work Conference and the national "two sessions," actively expand effective investment, focus on improving investment efficiency, take well-targeted steps, give full play to the role of various government investment tools, better mobilize social investment, promote stable investment growth, and give full play to the role of investment in expanding demand and improving supply. Thank you.
Reuters:
How do you predict the economy will perform in the first quarter? From a consumption perspective, do you think we can see the effects of the policies to boost consumption? And what impact will the U.S. tariffs have on China's economy going forward? Thank you.
Fu Linghui:
Thank you for your questions. Amid the complex environment, everyone is paying more attention to the situation in the first quarter. In January and February this year, it can be said that the effect of macro policies continued to emerge, the economy started off smoothly, and the development trend took a new turn for the better. Judging from recent developments, although the external environment has become more complex and severe, unilateralism and protectionism have intensified, global monetary policies have become divergent, the risk of volatility in the international market has increased, domestic demand has been weak, and some companies have encountered difficulties in production and operation, the long-term positive trend of the Chinese economy has not changed. China has obvious advantages in terms of its enormous market, complete industrial system and abundant human resources. There is broad incremental space for upgrading demand, optimizing the structure and transforming old growth drivers into new ones. Both existing policies and incremental policies continue to be effective. The economy is expected to maintain a generally stable development trend with steady progress in the first quarter. The specific aspects are as follows:
First, the economy has continued to recover. In the first two months, production and supply grew steadily, consumption and investment rose steadily, and the growth rates of most major indicators were faster than the whole of last year, laying a good foundation for a promising start for the Chinese economy in the first quarter. In the first two months, the value added of industrial enterprises above designated size grew by 5.9% year on year, 0.1 percentage point higher than the whole of the previous year. The Index of Services Production grew by 5.6% year on year, 0.4 percentage point higher than the previous year. Investment in fixed assets grew by 4.1%, 0.9 percentage point higher than the whole of the previous year. Total retail sales of consumer goods increased by 4%, 0.5 percentage point higher than the previous year. These main indicators show a steady upward trend.
Second, domestic demand is expected to gradually expand. In terms of consumption, recently, the General Office of the CPC Central Committee and the General Office of the State Council issued a special action plan to boost consumption. All localities and government departments have successfully launched measures to boost consumption and benefit the public. By making greater efforts to promote consumer goods trade-in programs in more areas and innovating diversified consumption scenarios, these initiatives are expected to drive the steady growth of consumption. In terms of the consumer confidence index, the February index was 0.9 percentage point higher than the previous month, rising for the third consecutive month. In terms of investment, all parties have increased their efforts to stabilize investment, strengthening support for projects, funds and other production factors. They have also increased investment in infrastructure related to people's lives and innovation, which is conducive to continuous investment growth. In the first two months, infrastructure investment rose 5.6% year on year, an acceleration of 1.2 percentage points from last year. Investment in high-tech industries grew by 9.7%, significantly outpacing overall investment growth.
Third, the effects of macroeconomic policies continue to be evident. Greater efforts have been made to promote large-scale equipment renewal and consumer goods trade-ins, and these policies have continued to take effect. Based on the situation in the first two months, driven by the expansion of consumer goods trade-ins, retail sales of household appliances and audio-visual equipment, furniture, stationery and office supplies and communication equipment by enterprises above designated size all posted double-digit growth. With large-scale equipment renewal driving growth, purchase of equipment and instruments rose 18%. The gradual implementation of more proactive fiscal policies and a moderately accommodative monetary policy will support sustained economic recovery and improvement.
Fourth, market expectations and confidence have improved. With macroeconomic policies yielding positive results, the economy is recovering and trending upward. The property and stock markets have exhibited positive changes, and breakthroughs in cutting-edge technological fields like domestic large-scale AI models and humanoid robots have boosted social confidence. In January and February, the real estate market continued to exhibit a stable trend, while transaction volume and turnover on the Shanghai and Shenzhen stock exchanges maintained rapid growth. The expectations of business entities continued to improve. In February, the manufacturing PMI increased significantly, and the non-manufacturing business activity index remained within the expansionary range. These positive changes contribute to the expansion of production and demand, and help promote the smooth circulation of the economy.
Overall, despite facing certain risks and challenges, China's economic fundamentals remain sound, with multiple advantages, strong resilience, and significant potential. The supporting conditions and fundamental trends for long-term sound economic development remain unchanged. As macroeconomic policies continue to take effect, the economy in the first quarter is expected to maintain overall stability and make steady progress. Thank you.
Dingduan News:
As outlined in this year's government work report, key development targets this year include a surveyed urban unemployment rate of around 5.5% and the creation of over 12 million new urban jobs. What is the state of employment currently? Thank you.
Fu Linghui:
Thank you for your question. Employment impacts people's livelihoods and is a concern for everyone involved. At the start of this year, relevant departments began implementing proactive measures to stabilize and promote employment. They have supported diverse business entities in adding jobs to drive the expansion and upgrading of employment opportunities. Overall, employment has remained largely stable. Based on past experience, January and February are typically the months when migrant workers return home before the Spring Festival and then return to work after it. During this period, there are certain fluctuations in the supply and demand of the labor market, which often lead to a seasonal rise in the surveyed urban unemployment rate. As workers gradually return to their posts following the Spring Festival, the urban unemployment rate typically decreases. This year's circumstances have largely followed this trend. In January and February, the national surveyed urban unemployment rate increased. In February, the rate stood at 5.4%, which was 0.2 percentage point higher than the previous month. Overall, the fluctuation remains within a normal range, and the overall stability of employment has not changed. On a two-month average, the surveyed urban unemployment rate for January and February was 5.3%, roughly the same as for the same period last year.
However, it should also be noted that stabilizing and promoting employment this year will continue to require substantial and sustained efforts. The current international environment is complex and challenging, and the foundation for China's economic recovery and improvement remains fragile.
This year, ensuring stable employment will be crucial, given the 12.22 million new college graduates, the need to maintain over 30 million jobs for those lifted out of poverty, and the substantial number of rural migrant workers. Consequently, this year's government work report emphasizes the need for increased efforts to stabilize and expand employment, refine the employment-first policy, promote full employment and improve job quality. Furthermore, it proposes implementing supportive plans in key sectors, conducting extensive vocational training programs, enhancing services for employment and new businesses, and bolstering protections for workers' rights and interests. These measures will support high-quality and full employment.
In the next phase, as China expands demand across all sectors and makes concerted efforts to drive high-quality development — through the transformation and upgrading of traditional industries, as well as the cultivation and growth of emerging industries and new business formats — a solid foundation will be established for promoting employment. In addition, the employment-first policy continues to take effect, and the employment environment is improving. These factors contribute to maintaining overall employment stability. Thank you.
Shou Xiaoli:
Due to time constraints, we will take one last question.
The Poster News APP:
During this year's national "two sessions," scientific and technological innovation was undoubtedly a hot topic, with keywords such as new quality productive forces, AI Plus and low-altitude economy sparking heated discussions. Based on data from January and February, how has scientific and technological innovation driven the development of new quality productive forces? Thank you.
Fu Linghui:
Thank you for your question. As you mentioned, the development of new quality productive forces is indeed of great interest to all parties. The CPC Central Committee has attached great importance to cultivating and developing new quality productive forces. All localities and government departments have actively introduced measures supporting new quality productive forces, which continues to produce effects. Looking at the situation in the first two months, new breakthroughs have been made in scientific and technological innovation; new industries have developed well; the digital and green economies have continued to grow; and the transformation and upgrading of traditional industries has been steadily advanced. New progress has been made in the development of new quality productive forces.
First, emerging industries have maintained rapid growth. Emerging industries are an important engine for developing new quality productive forces. In the first two months, the value added of high-tech manufacturing increased by 9.1% year on year, 0.2 percentage point higher than last year. Domestic AI large language models have emerged, and innovative products such as AI Plus have developed rapidly, advancing the transformation of production methods and driving the rapid growth of high-end manufacturing. From January to February, the output of high-tech products such as IC wafers, industrial robots, electric multiple units (EMUs) and civilian drones increased by 19.6%, 27%, 64% and 91.5% year on year, respectively.
Second, the vitality of the digital economy has been continuously released. The digital economy is a focal point for developing new quality productive forces. All localities and government departments have accelerated their steps to advance both the digital transformation of traditional industries and the digital industry. The digital economy has maintained a good momentum of development. In terms of industries, in the first two months, the value added of digital product manufacturing enterprises above designated size increased by 9.1% year on year, and the production index of the information transmission, software and information technology service sectors increased by 9.3%. In terms of products, the output of smart products such as 3D printing equipment and virtual reality (VR) equipment increased by 30.2% and 37.7%, respectively. The large-scale application of 5G technology has been further promoted. During the Spring Festival, 5G mobile data consumption increased by 35% year on year, accounting for 60.9% of mobile internet data consumption.
Third, the green economy has created new growth drivers. Solid steps have been taken to advance the green transition, injecting new impetus into the development of new quality productive forces. In the first two months, wind and solar power generation by enterprises above designated size increased by 10.4% and 27.4% year on year, respectively; and the output of green products such as NEVs, lithium-ion power batteries for vehicles, and carbon fiber and its composite materials increased by 47.7%, 35.4% and 51.5%, respectively.
Fourth, industrial transformation and upgrading has been advancing steadily. The digital transformation and intelligent upgrading of industries has added new sources for the development of new quality productive forces. In the first two months, investment in the upgrading of manufacturing technologies increased by 10% year on year, 5.9 percentage points higher than the growth rate of total investment. At present, China has built more than 30,000 basic-level smart factories, more than 1,200 advanced-level smart factories, and more than 230 excellence-level smart factories, which will effectively empower industrial transformation and upgrading.
Overall, since the beginning of this year, new quality productive forces have grown and expanded and have sustained good development momentum. Next, we will make greater efforts to stimulate the vitality of traditional industries, accelerate the cultivation and development of emerging industries, and actively lay the groundwork for future industries and bolster the development of new quality productive forces to inject more new impetus into China's economic growth. Thank you.
Shou Xiaoli:
Thank you, Mr. Fu, and thank you to friends from the media for your participation. Today's briefing is hereby concluded. Goodbye.
Translated and edited by Yang Chuanli, Liao Jiaxin, Gong Yingchun, Wang Yanfang, Yan Xiaoqing, Xu Xiaoxuan, Yang Xi, Xu Kailin, Wang Wei, Fan Junmei, Liu Sitong, Li Huiru, Li Xiao, Zhang Junmian, David Ball, and Jay Birbeck. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.
