SCIO briefing on China's economic performance in 2019
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E-mail China.org.cn, January 21, 2020
Yicai TV:
According to the report presented to the 19th CPC National Congress, China's economy has been transitioning from a phase of rapid growth to a new stage of high-quality development. How much progress has been made in high-quality development? In addition, what important work are we going to do to promote high-quality development in 2020? Thank you.
Ni Jizhe:
Thank you for your question. High-quality is the current theme of China's economic development. Currently, China's economy has been transitioning from the phase of rapid growth to a new stage of high-quality development. All the achievements in 2019 as we introduced earlier can be summarized in two sentences: the national economy was generally stable and the quality of development steadily improved. It is fair to say that in 2019 all localities and departments adhered to and implemented the new development philosophy, and were engaged in building a modernized economy and promoting high-quality development. The quality and efficiency of development have been continuously improved.
First, the major economic indicators stayed within an appropriate range. All sectors remained committed to the general principle of pursuing progress while ensuring stability, stepping up efforts in stabilizing employment, finance, foreign trade, foreign investment, investment and expectations. Four major categories of macroeconomic indicators, namely those of GDP growth, job creation, consumer prices and international balance of payment, match each other. These statistics have been introduced earlier, and I'll bring them up again for your reference. China's economy grew 6.1% year on year in 2019. The surveyed urban unemployment rate nationwide stood at 5.2% in December. China's consumer price index (CPI) rose 2.9% year on year in 2019, and China saw a stable and better foreign trade structure with positive growth. Therefore, all major indicators were in line with the projected targets, and remained within an appropriate range. This shows that China's economy has been transitioning to a stage of high-quality development.
Second, the industrial structure in China has been upgraded. The service sector saw rapid growth. In 2019, the added value of the service industry, or the tertiary industry, increased by 6.9% over the previous year. This was 1.2 percentage points faster than that of the secondary industry, and accounted for 53.9% of the country's GDP. According to the economic census, the service industry accounted for 53.3% of the GDP in 2018, thus it increased by 0.6 percentage points. The service industry's contribution to economic growth is even higher, reaching 59.4%, which is 22.6 percentage points higher than that of the secondary industry. Therefore, the growth of the service industry has become an important stabilizer of economic growth. The industrial structure continues to optimize. Among the industries above the designated scale, the growth rates of the added value of equipment manufacturing and high-tech manufacturing are higher than that of industries above the designated scale as a whole. These two industries accounted for 32.5% and 14.4% of the overall industries above the designated scale, which reflected the transformation and upgrading of the industrial structure.
Third, the demand structure is being optimized. Consumption acted as a major driving force for economic development. In 2019, the final consumption expenditure contributes to 57.8% of the economic growth, 26.6 percentage points higher than the contribution rate of gross capital formation. The consumption structure has also been continuously upgraded, which is reflected in the rising levels of service consumption. Investment in high-tech industries and the social sector has also grown rapidly. In 2019, the investment of high-tech industries increased by 17.3% over the previous year, which was 11.9 percentage points faster than the total investment. The investment in the social sector increased by 13.2%, which was 7.8 percentage points faster than the total investment.
Fourth, the gap between urban and rural development is narrowing, and the level of urbanization exceeded 60%. By the end of 2019, permanent urban residents accounted for 60.6% of the total population, exceeding the 60% mark for the first time. This is also a landmark statistic demonstrating the progress of China's industrialization and urbanization. The growth of per capita disposable income in rural areas outpaced that in urban areas by 1.2 percentage points, and the central and western regions saw faster growth than the eastern region. In 2019, the added value of industrial enterprises above the designated scale in the central and western regions increased by 7.7% and 6.2%, faster than that in the eastern region by 2.9 and 1.4 percentage points respectively. Among the 11 provinces and cities along the Yangtze River Economic Belt, the added value of industrial enterprises above the designated scale in 10 provinces saw a faster growth rate than the national average level. It is fair to say that high-quality development has been achieved based on the ecological protection in the Yangtze River Economic Belt.
Fifth, the drive for innovation continues to be strengthened. Emerging industries, new commercial activities and new models have also developed rapidly. In 2019, the value-added of industrial strategic emerging industries rose by 8.4 percent over the previous year, 2.7 percent faster than that of industrial enterprises above the designated size. The output of emerging industrial products also increased rapidly, with urban rail vehicles rising 32.6 percent and solar batteries rising 26.8 percent. From January to November, the business revenues of strategic emerging industries, science and technology and high-tech services increased by over 12 percent. In 2019, online retail products sales increased by 19.5 percent. The total volume of express deliveries amounted to 63 billion pieces, up 24 percent year on year.
Sixth, the economy continues to benefit from the dividend of reform and opening up. The reforms - featuring streamlining governance and delegating power, integrating the delegation of power and strengthening management, and optimizing services — have gone deeper. The business environment has also improved significantly. According to the World Bank report 2019, China ranks 31st and has soared 15 places from last year. The reform of the finance and taxation system has made solid progress and a trend of multi-dimensional opening-up has been steadily growing. It is estimated that the total tax and fee cuts will surpass 2.3 trillion yuan. China hosted the second Belt and Road Forum for International Cooperation, the Conference on the Dialogue of Asian Civilizations, and the second China International Import Expo. It has also set up another batch of pilot free trade zones and expanded the Shanghai Pilot Free Trade Zone. Economic and trade exchanges have been active between China and the countries and regions involved in the Belt and Road Initiative (BRI). In 2019, the total volume of trade in goods between China and other BRI countries increased by 10.8 percent, growing 7.4 percent faster than the overall growth of imports and exports. According to statistics from January to November, Chinese businesses' non-financial direct investment in BRI countries accounted for 12.9 percent of China's total non-financial FDI during the same period.
In 2020, we will surmount difficulties to successfully fulfill the 13th Five-year Plan and to win a decisive victory for the completion of the goal of building a moderately prosperous society in an all-round way. We will lay a solid foundation for the development of the 14th Five-year Plan and for the opening of the second Centennial goal. We must also promote reasonable growth of the economy and the steady increase of the quality of its growth, as well as the high-quality development of the economy. We must adhere to stable macro policies, flexible micro policies and basic social policies, so as to improve the effectiveness of forward-looking and targeted policies. We must accelerate the implementation of key projects, improve the basic industrial capacity and the quality and capacity of consumption. We must also drive end consumption to unleash strong domestic market potential. We will increase investment in research and development, speed up the transformation and application of scientific and technological achievements, give full play to the principal role of the technological innovation of enterprises, and promote industrial upgrading and development. At the same time, we will continue to deepen supply-side structural reform, secure progress in critical battles against potential risk, poverty, and pollution, and work to make up for weaknesses. We will continue to promote reforms to streamline administration, delegate powers, improve regulation, and upgrade services, so as to optimize the business environment, actively explore diversified markets, and expand a high-level of opening up. We will promote the optimization and adjustment of the economic structure, accelerate industrial upgrading, and keep the economy moving towards high-quality development.
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