SCIO briefing on China's economic performance in the first quarter of 2020
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E-mail China.org.cn, April 18, 2020
CCTV:
According to statistics you've just released, economic growth apparently slumped in the first quarter of this year, and the decline of most indicators narrowed to a great extent in March. Under the complex economic circumstances both at home and abroad, what are your comments on the economic situation in the first quarter and its trend in the next phase? Thank you.
Mao Shengyong:
Thank you for your question. Based on the newly released statistics and my introduction, the outbreak of COVID-19 had a great impact on China's economic operation. In the first quarter of 2020, all economic indicators slumped, but we also noted that the main indicators showed recovery momentum in March, and the decline narrowed sharply. At the same time, we must take into account that, despite the impact of the pandemic, basic industry has maintained a normal level of increase; the supply of pandemic prevention commodities and daily necessities has been guaranteed; the livelihoods of 1.4 billion people have been guaranteed, and the overall social situation has been stable.
The statistics had the following prominent characteristics:
First, primary economic indicators improved in March. As pandemic prevention and control measures have continuously taken effect and the resumption of work and production has been accelerated, the decline of main economic indicators — including industries, services, investments, total retail sales of consumer goods, imports and exports — narrowed sharply in March, showing signs of improvement. For example, the value-added of industrial enterprises above the designated size grew by 8.5% year-on-year in March last year, the highest growth speed among 12 months of last year. In March of this year, the value-added of industrial enterprises above the designated size decreased by 1.1%, which is 12.4 percentage points slower than the decline of the first two months. The output of industrial enterprises above the designated size in March returned to the level of the same period last year. In March, as for 41 industries, 90% of the value-added increased faster than that of the first two months and 40% realized year-on-year growth. As for the output of statistically more than 600 main industrial products, 40% of them realized year-on-year growth. Therefore, statistics showed that the restoration of industrial production has taken effect, and the other related indicators displayed similar characteristics.
Second, employment and commodity prices were generally stable. With the restoration of production and normal life, the overall employment situation was stable. In March, the surveyed unemployment rate in urban areas was 5.9%, 0.3 percentage points lower than that of February. The surveyed unemployment rate of members of the population aged from 25 to 59 was 5.4%, 0.2 percentage points lower than that of last month. We can see that, despite the impact of the pandemic, there was no large-scale unemployment across China, and the employment situation was generally stable. As for commodity prices, the growth of the CPI declined in March. The CPI went up by 4.3% year-on-year in the month, 0.9 percentage points lower than February, and down by 1.2% month-on-month. It grew by 0.8% in February month-on-month. In the first quarter, the consumer price index went up by 4.9% year-on-year, which is 0.4 percentage points lower than that of January and February. What does this mean? The main reason behind the decline of CPI growth was the decline of food price growth, especially the year-on-year decline of pork price growth and its month-to-month decline. The results showed that the food supply was sufficient, and the logistics chain was smooth.
Third, industrial upgrading developed continuously. During the period of pandemic prevention and control, overall production capacity, including the matching capacity of the whole industry, was fully developed. Against the backdrop of a severe pandemic, the industry was not seriously impacted, and the new drivers represented by new industry, products and business models grew against the trend. In March, high-tech industry went up by 8.9% year-on-year, which is 20 percentage points higher than that of January and February. 3D printing equipment, mono-crystal silicon, polycrystalline silicon and smart watch kept developing rapidly. The economic performance related to the internet, e-commerce, online learning and long-distance inquiry was energetic and realized speedy development. The value of online physical commodity retail sales increased by 5.9% in March, accounting for 23.6% of the total retail sales of consumer goods, or 5.4 percentage points higher than that of last year. From the perspective of added value, the value-added of information transmission, software and IT services increased by 13.2% in the first quarter, contributing to the growth of GDP by 0.6 percentage points. The financial industry grew by 6%. Therefore, though the pandemic was daunting, the rapid growth of new drivers was not changed.
Fourth, stable progress has been made in terms of poverty-alleviation tasks. The CPC Central Committee has attached supreme importance to the poverty-alleviation work and funded 139.6 billion yuan during the first quarter of this year that will trickle down to the needy population. So far, construction has begun on more than 260,000 poverty reduction projects in 22 provincial-level regions in central and western parts of the country. Meanwhile, average personal disposable incomes in Sichuan, Guangxi, Tibet, Guizhou and Qinghai, where the size of the destitute population is larger than in other parts of the country, grew nominally by 5.3%, 4.6%, 9.5%, 4.8% and 3.1%, respectively, with each registering a rate above the national average.
Fifth, the momentum of rebound is expected to continue. Electricity consumption, considered one of the most important indicators, registered a decline in March that was far narrower than in the prior month. Nationwide electricity consumption and generation rebounded, and have kept rising since the end of March. Moreover, China's total electricity generation in early April was observed with positive growth. According to the National Bureau of Statistics, the first quarter of 2020 saw 11,477 investment projects -- estimated above 50 million yuan each -- in its database, an increase of 144 in number year on year. Sales of excavators grew by 11.6% year on year in March. Meanwhile, imports and exports have significantly improved compared to the first two months, and in March alone, the performance has been constantly refined. More to the point, based on our investigations and researches, imports and exports kept on ameliorating in early April, following a slew of policies devised to assist enterprises to surmount financial woes and help resume work and production, and these efforts continue to pay off
In our next phase, stronger policies will be rolled out in response to changing situations. It is foreseeable that the economy will continue to rebound, to improve and to secure sound momentum. Thank you.
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