SCIO briefing on China's economic performance in 2019
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E-mail China.org.cn, January 21, 2020
China Central Television:
The domestic and foreign environment for China's development faced severe challenges in 2019. Mr. Ning, what do you think of China's economic performance last year and did China achieve its goals set early in 2019? Thank you.
Ning Jizhe:
In 2019, under the strong leadership of the Central Committee of the CPC with Comrade Xi Jinping at its core, we stayed committed to the underlying principle of pursuing progress while ensuring stability, continued to pursue supply-side structural reform as our main task, strengthened the role of macroeconomic policies in making counter-cyclic adjustments, and maintained stability in employment, the financial sector, foreign trade, foreign investment, domestic investment, and market expectations. The national economy maintained stable growth, with a steady increase in the quality of development, and all the major targets and tasks were fulfilled. The country's overall economic performance demonstrated the following six features.
First, the economy maintained medium-to-high speed growth. As I said before, the GDP in 2019 reached 99.09 trillion yuan, increasing 6.1% year on year, which was within the government's target of 6% to 6.5%. It was significantly higher than the global average, and ranked among the fastest growing among the world's major economies. China registered the fastest growth among trillion-dollar economies. You may have noticed that in 2019, the United States saw an economic growth of 2.3%, Japan and the Eurozone grew slightly more than 1%, and India a bit higher than 5%. Thus, China was still the No. 1 in terms of economic growth. Also, China's per capita GDP reached 70,892 yuan. Measured by the average annual exchange rate, that was $10,276, crossing the $10,000 mark. This is a new breakthrough.
Second, job growth continued to expand. In 2019, the urban unemployment rate each month hovered between 5% to 5.3%, realizing our target of keeping the rate below 5.5%. In December, that number stood at 5.2%. Throughout 2019, the number of new jobs was 13.52 million, exceeding the 13 million mark for seven years in a row, and significantly higher than our target of 11 million. As I said earlier, the number of migrant workers is still growing and it reached 291 million in 2019.
Third, prices were generally stable. The CPI expanded 2.9% in 2019, realizing our target of keeping the rate below 3%. Food prices rose by 9.2%, and non-food prices grew by 1.4%. CPI excluding food and energy rose 1.6%, lower than in 2018.
Fourth, foreign trade and investment increased despite the overall trend of decline. In 2019, the total value of imports and exports of goods increased by 3.4% over the previous year, with exports increasing by 5% and imports increasing by 1.6% respectively, thereby achieving steady and higher-quality growth and meeting the targets set early last year. The trade surplus also increased by 25.4% over 2018. In terms of foreign investment, against the global backdrop of steep declines in cross-border investment, China's utilized foreign investment increased 6% from January to November and the total amount last year is expected to top $130 billion. By the end of 2019, foreign exchange reserves stood at 3.11 trillion yuan, an increase of $35.2 billion from the end of 2018.
Fifth, the income of Chinese residents grew at a similar pace with the national economic growth. In 2019, per capita disposable income reached 30,733 yuan, registering an inflation-adjusted growth of 5.8%. This is similar to the growth rate of GDP and on par with the growth rate of per capita GDP. As GDP rose 6.1% last year and the entire population grew by more than 0.3%, the country's per capita GDP rose 5.8% or so. This achieved our target of keeping residents' income growth on par with economic growth. An especially heartening piece of news is that the per capita disposable income of rural residents registered a real growth of 6.2%, continuing to be higher than that of urban residents. The income gap between urban and rural residents is continually narrowing.
Sixth, our economic growth demonstrated higher quality and efficiency. With the pushing ahead of supply-side structural reforms, the gains made in the five priority tasks – cutting capacity, cutting excess urban real estate inventory, de-leveraging, cutting costs, and strengthening areas of weakness – were consolidated. As I said earlier, the rate of industrial capacity utilization reached 76.6%, higher than in 2018. Measured by the debt-to-asset ratio of industrial enterprises above the designated scale (annual revenue of 20 million yuan or more coming from their main business operations), the micro leverage ratio stood at 56.9% at the end of November, down 0.3 percentage points from the same period in 2018. The ratio between urban and rural residents' per capita disposable income was 2.64, down 0.05 from that in 2018, demonstrating a narrowing gap between urban and rural incomes. Industries, investment and other major indicators in central and western China registered faster growth than in the country's east, showing that the gap in development among different regions is narrowing.
Noticeably, major macroeconomic indicators showed positive changes in the fourth quarter, especially in November and December. From October to December last year, GDP rose 6%, this was equal to that in the third quarter and had exceeded expectations. In the last three months last year, the value-added of industrial enterprises above the designated scale grew 6% year on year, which is a 1 percentage point higher than in the third quarter. In December particularly, the added value rose 6.9%, up 2.2 and 0.7 percentage points from that in October and November, respectively. The total annual retail sales of consumer goods in the fourth quarter grew 7.8% year on year, 0.2 percentage points higher than in the third quarter. In particular, that number in December was 8%, up 0.8 percentage points from October and equal to that in November. The total fixed-asset investment (excluding rural households) grew 5.4% last year, which was 0.2 percentage points higher than that from January to November. Foreign trade in December rose 12.7%, 10.7 percentage points higher than in November. The PMI in December was 50.2%, exceeding the 50-point mark which indicated that there was economic expansion for two months in a row. The non-manufacturing business activity index was 53.5%, continuing to be in the promising range.
Therefore, all the major macroeconomic indicators met expectations and fell within the targets set in early 2019. In particular, these indicators showed positive changes in November and December. Thank you.
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