SCIO briefing on China's economy Q1-Q3 2019
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E-mail China.org.cn, October 19, 2019
Shou Xiaoli:
Thank you, Mr. Mao. Now the floor is open for questions. Please identify the news outlet you represent before asking questions.
CCTV:
We notice that the economic growth rate further slowed down during the first three quarters of this year. Does that mean the economy is under greater downward pressure? How do you analyze the current economic conditions?
Mao Shengyong:
Thank you for your question. Since the beginning of this year, the world economy and international trade have both seen slower growth and, so, the Chinese economy has been under mounting downward pressure. The CPC Central Committee issued a series of policies for counter-cyclical adjustment in a timely manner to enable the economy to better withstand such pressure. The key economic indicators in the first three quarters show the economy has maintained overall stability. I will analyze the current economic condition from the following perspectives:
First, although there was slower growth in the domestic economy, the growth rate is still leading the world. The GDP grew 6.2% in the first three quarters, only 0.1 percentage points slower than the first half of the year. It is estimated the growth rate should be the fastest among all economies with a size of more than $1 trillion. The growth may be slower compared to our growth in previous years, however, it is still a high rate globally.
Second, key macroeconomic indicators remain in a proper range in spite of downward pressures. In September, the surveyed unemployment rate in urban areas was 5.2%, the same as the previous month.In the first three quarters, employment was generally stable and the number of newly-employed people in urban areas almost met the whole-year target. The growth of consumer price increased in September to 3.0%. However, the core CPI excluding the prices of food and energy went up by 1.5%, which was slightly lower than that of previous months. In the first three quarters, the consumer price registered a modest increase of 2.5% year-on-year.During the same period, nationwide per capita disposable income registered real growth of 6.1% after deducting price factors, almost equal to the economic growth and faster than the growth of per capita GDP. Even the 8.8% nominal growth in per capita disposable income was relatively good. The energy consumption continued to fall during the first three quarters, while the production and utilization proportion of clean energy sources continue to rise.
Third, although there are external uncertainties, there are more certainties domestically which will play their due role in driving the economy.
For example, the service sector is playing a bigger role in driving economic growth. In the first three quarters, its value-added growth was 7% and consumption of services registered a relatively high growth of over 10%, which will drive the overall advance of the service sector and increasingly consolidate its stabilizing role.
Meanwhile, the potential for consumption is being unleashed. The contribution of final consumption expenditure to GDP growth was more than 60% in the first three quarters. The fundamental role of consumption in driving the economy will be strengthened with personal income increasing, the consumption environment continuing to improve, social security being enhanced and the supply capacity being strengthened.
In addition, China's economic structure continues to upgrade. In September, in industrial enterprises above designated size, the added value of high-tech industries grew by 11% year-on-year, 4.9 percentage points higher than the previous month; the added value of strategic emerging industries grew by over 9%. Investments in areas of weakness and high-tech industries maintained rapid growth. From January to September, investments in high-tech industries and in the social domain both maintained growth above 13%.
Lastly, policies continue to have their desired effect. A batch of policies on cutting taxes and fees have been issued this year. The issuance of special bonds by local governments have been increased and the issuance process quickened. All those policies continue to take effect. The investment in infrastructure has rebounded in recent months. The financial sector is increasing its support for the real economy and facilitating a lowering of real interest rates. Some of the policies have delivered desired results and others will continue to take effect in the future.
Generally speaking, in spite of stern external environment, favorable domestic factors will ensure a stable economic performance in the near future. Thank you.
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