SCIO briefing on China's economic performance in 2020
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E-mail China.org.cn, January 20, 2021
CCTV:
Due to the huge impact of the pandemic and a grave and complex environment both at home and abroad, China's economy recovered quarter by quarter in 2020 after a decline in the first quarter. What do you think of the economy throughout the year? Did we meet the goals and tasks for the year? Thank you.
Ning Jizhe:
Thanks for your questions. 2020 was an unusual year in China's history. In 2020, we faced with a grave and complex environment both at home and abroad on account of the huge impact of the pandemic in particular, but under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, all localities and departments put the people and their lives first, adhered to the general working guideline of making progress while maintaining stability, coordinated the work of epidemic prevention and control and economic and social development, pledged stronger macro policies to offset the economic impact of COVID-19, took solid steps to ensure stability in six areas, and fully carried out tasks to maintain security in six fronts. Major strategic achievements were made in epidemic prevention and control, and the main goals and tasks of economic and social development were accomplished better than expectation. The 13th Five-Year Plan came to a satisfactory conclusion and the task of building a moderately prosperous society in all respects will soon be completed. The achievements were mainly shown in the following aspects.
First, major progress has been made in coordinating epidemic response and economic and social development. Thanks to the joint efforts of the whole country, China was the first to bring the epidemic under control, to resume work and production, and to achieve positive economic growth. By late March, the spread of COVID-19 on the mainland had been initially halted, and by mid-April, more than 90% of the enterprises above designated size had resumed operation. The GDP grew by 3.2% in the second quarter, turning from negative to positive, and by 4.9% in the third quarter, 6.5% in the fourth quarter, and 2.3% for the whole year. China is expected to be the world's only major economy to achieve positive economic growth in 2020. There are 18 major economies in the world each with a GDP over US$1 trillion, and economic data from most of these countries is not yet available. Based on the data from the first three quarters of 2020, China is the only major economy to register positive growth and the only one with positive growth for the whole year. In 2020, China's GDP reached 101.6 trillion yuan, exceeding a new watermark of 100 trillion yuan.
Second, decisive success has been achieved in eradicating extreme poverty. All rural residents below the current poverty line have been lifted out of poverty, and all 832 impoverished counties have been raised out of poverty. Extreme poverty has been eliminated, the first time in Chinese history. The personal income for farmers in poor areas has increased rapidly. In 2020, the nominal per capita disposable income growth of rural residents in Guangxi, Sichuan, Guizhou, Yunnan, Gansu, Ningxia, and Xinjiang, the seven provinces (autonomous regions) with a relatively large impoverished population, were all 0.2 to 1.7 percentage points higher than that of the rural residents across the country.
Third, remarkable results have been secured in macro-regulation, with quarterly indicators for economic growth returning to normal levels. In the fourth quarter, China's GDP and the added value of the industrial enterprises above designated size grew by 6.5% and 7.1% year on year, respectively, and 0.7 and 1.1 percentage points higher than the same period of 2019. The annual employment and price targets have been well met. In 2020, 11.86 million new urban jobs were created in the country, surpassing the target set for the year. The annual surveyed urban unemployment rate averaged 5.6% nationwide, lower than the expected target of about 6%. The consumer price index (CPI) for 2020 rose by 2.5% over the previous year, lower than the projection of around 3.5%. Growth in personal income was basically in step with economic growth. In 2020, the per capita disposable income of Chinese citizens grew by 2.1% in real terms, basically in line with economic growth. Overall, the balance of payment has been improved. By the end of 2020, China's foreign exchange reserves stood at US$3.22 trillion, an increase of US$108.6 billion year over year. Energy consumption per unit GDP has been reduced by around 0.1% in 2020 when compared to 2019. The main targets for macro-regulation set out in the government work report have been achieved and exceeded expectations.
Fourth, tasks have been carried out to ensure stability on six fronts (employment, finance, foreign trade, foreign investment, domestic investment, and market expectations) and guarantee stability in six areas (jobs, daily living needs, food and energy, industrial and supply chains, the interests of market players, and the smooth functioning of grassroots governments), and effective results have been achieved. Employment has been safeguarded. In December, the surveyed urban unemployment rate of the main working population aged 25 to 59 nationwide registered 4.7%, a return to levels seen during the same period of 2019. People's livelihoods have been effectively ensured. In 2020, the per capita net transfer income of Chinese citizens registered a nominal year-on-year growth of 8.7%, indicating greater efforts to meet the basic needs of the people. The vitality of market players have been increased. In the first 11 months of 2020, the profits of industrial enterprises above designated size grew by 2.4% year on year, maintaining double-digit growth for six months in a row. Grain and energy supply have increased. In 2020, grain output totaled 669.5 billion kilograms and the total primary energy production increased by some 2.8% over the previous year. Industrial and supply chains have been basically stable, and the growth of industries has continued to expand. In 2020, added value growth was reported in 25 out of the 41 industrial categories of the industrial enterprises above designated size, five categories more than that of the first three quarters. The functioning of grassroots governments has been well maintained. From January to November, expenditures in the general public budget for social security and employment, housing security, and poverty alleviation all related to the guarantee in three areas of the grassroots governments (people's livelihood, employment, functioning) rose by 9.8%, 9.5%, and 9.2%, respectively.
Fifth, reform and opening-up have created development miracles. Enterprises across various types of ownership operate more efficiently. In November, state holding industrial enterprises above designated size reported double-digit profits and year-on-year growth, registering positive growth for the sixth consecutive month. From January to November, the profits of industrial enterprises above designated size with foreign investment and investment from Hong Kong, Macao, and Taiwan grew by 4.3% 1.7 percentage points higher than in the first three quarters. The profits of private industrial enterprises above designated size increased by 1.8%, compared with a decline of 0.5% in the first three quarters. All these show that industrial enterprises with various types of ownership have experienced a comprehensive improvement in their efficiency. Supply-side structural reform has been deepened. China's industrial capacity utilization rate reached 78% in the fourth quarter, up 1.3 percentage points over the third quarter, the highest since 2013. The reforms to streamline administration and delegate power, improve regulation, and upgrade services have continued to show results. From January to November, an average of 22,000 new enterprises were established every day, with a net increase of 12,000 per day. In 2020, the added value of high-tech manufacturing grew by 7.1% over the previous year, 4.3 percentage points higher than that of all the enterprises above designated size, and the online retail sales of goods increased by 14.8%. The growth in foreign trade and inbound investment was better than expected. In 2020, China's total import and export of goods reached a record high, up 1.9% over the previous year, despite a sharp decline in global trade and cross-border investment. From January to November, China's utilized foreign capital increased by 6.3% year on year.
Sixth, historic achievements in the building of a moderately prosperous society in all respects have been made. The main goals set out in the 13th Five-Year Plan have been fulfilled. Our GDP exceeded 100 trillion yuan and the per capita GDP exceeded US$10,000 in 2020. The economic structure has continued to improve; major projects have been basically completed, and; our economic, scientific, and technological strength, as well as the composite national strength, have risen to new highs. Major breakthroughs have been made in the three critical battles against poverty, pollution, and major risks, with accomplishments in the fight against poverty winning international recognition. Approximately 55.75 million rural residents have been lifted out of poverty. The first poverty reduction surveys show that all 13.85 million registered poor households have had their basic living needs met and have access to compulsory education, basic medical services, housing, and safe drinking water. Remarkable results have been achieved in pollution prevention and control. In 2020, the proportion of days with good air quality in 337 cities at or above the prefectural level reached 87%, an increase of 5 percentage points over the previous year. Progress has also been made in preventing and defusing major risks. Financial risks were manageable on the whole and the outstanding local government debt was within the budgeted limit approved by the National People's Congress. People's living standards have improved markedly. Over the past five years, more than 60 million urban jobs have been created. China has established the world's largest social security system, with its basic medical insurance covering over 1.3 billion people and basic old-age insurance covering nearly 1 billion people. Coordinated efforts have been made to implement the Five-sphere Integrated Plan, making coordinated progress in the economic, political, cultural, social, and eco-environmental fields. The confidence, pride, unity, and cohesion of the Party and the people of all ethnic groups have been enhanced remarkably.
In general, China's economy has recorded an extraordinary accomplishment in an extraordinary year, delivering results that have satisfied the people, won international recognition, and will go down in history. These achievements were hard-won after overcoming enormous difficulties, with COVID-19 still wreaking havoc around the world, the world economy falling into a severe recession, and the external environment becoming more complex and graver than before. These accomplishments are attributed to the strong leadership and sound policy-making of the CPC Central Committee with Comrade Xi Jinping at its core and the concerted efforts of the people of all ethnic groups, speaking volumes about the advantages of the socialist system with Chinese characteristics. Thank you.
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