SCIO briefing on China's economic performance in 2020
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E-mail China.org.cn, January 20, 2021
Reuters:
In 2020, China's total retail sales of consumer goods dropped by 3.9% and growth in December was also weak. Does this have to do with the COVID-19 epidemic? Will China introduce any measures to stimulate consumption in 2021? How do you predict the rates for investment and export in 2021? Thank you.
Ning Jizhe:
I can see that you read our statistics before raising this question. As you know, consumption plays a basic role in economic development. In the past year, the total retail sales of consumer goods registered negative growth but its growth in Q3 and Q4 had trended positive. In Q4, rates grew by 4.6%, which is close to normal levels in recent years. The fluctuations in December were caused by the resurgence of COVID-19 cases in several domestic locations. But if we look at the whole picture, as production supplies continue to increase, domestic consumption can still play a basic role in boosting economic development. In 2021, we can see many positive factors supporting stable economic recovery. China's economy is well-conditioned to maintain its recovery momentum. Though we are facing relatively high pressure in preventing inbound cases and a domestic resurgence, our economy is still growing on strong fundamentals.
First, we have a solid material foundation. Agricultural foundations are growing stronger, with total grain output exceeding 1.3 trillion jin (650 million tons) for six consecutive years. Meanwhile, the industry is playing a more dominant role in the national economy, and our total industry added value is over 30 trillion yuan. Infrastructure is also improving as transportation, telecommunications, energy, and the water conservation sector play a more important role in supporting the economy. These are strong material foundations for us to guard against various risks, maintain steady economic recovery, and ensure the basic well-being of the Chinese people.
Second, we have a complete industrial system. After years of effort, China has become the only country in the world to obtain all industrial categories listed in the United Nations industrial classification. Our total trade in goods ranks first in the world, and the country is the largest trading partner of 120 countries and regions. In the past year, in the face of COVID-19, China's industrial system has demonstrated a strong ability for self-adjustment and resilience. In 2021, China's complete production coordination system and its supporting capacity are bound to play a major effective role in dealing with various uncertainties.
Third, we have a huge market. With a population of 1.4 billion people, including a middle-income population of 400 million, and a total land area of 9.6 million square kilometers, China boasts the world's fastest-growing domestic market. The advantages of the huge market are obvious. With increased per capita income, the structural adjustment and upgrades in consumption will drive upgrades to the industrial, investment, and regional economic structures, providing a huge force for sustainable economic development. In 2021, our vast domestic market will provide enough room for economic growth and manoeuvre.
Fourth, we have built strong technological power. China is proving its strong momentum in technological innovations, boasting the world's second-largest R&D investment and a top filer of international patents, both driven by the development of hi-tech industries and emerging industries with strategic importance. China's emerging industry maintains strong momentum despite the economic headwinds over the past several years as well as the COVID-19 pandemic. The industry digitalization and the industrialization of the digital economy are also in full swing, which in turn will boost additional online consumption. These are the driving forces of China's high-quality economic development.
Fifth, we have abundant human resources. China has the world's largest workforce, with nearly 900 million people of working age (16 to 59 years old), 200 million skilled workers, and the world's largest population of research personnel. These also give continuous intellectual support to the country's high-quality development.
The strong CPC leadership and China's institutional advantages ensure stable and long-term economic development and social stability. The CPC Central Committee's far-sightedness and its sound decisions overall, the institutional advantage of socialism with Chinese characteristics that enables us to pool all resources to complete major missions, the sophistication of China's economic governance, and precise and effective macro-control policies are the keys to successfully preventing and controlling COVID-19 while making achievements in socio-economic development.
Despite the recent COVID-19 resurgence in some areas, the impact of COVID-19 on the economy is generally controllable. As the pandemic continues to spread around the globe, China's outbreak of locally-transmitted cases and cluster infections is posing some uncertainties to economic recovery, which is reflected in the slowed growth rate of December's retail sales.
Generally speaking, we have the abilities and the conditions to contain the spread of COVID-19. Thanks to our rich experience in COVID-19 response in the early stage of the pandemic, we have adopted swift, effective, and scientific measures to contain the spread of the coronavirus in areas experiencing a resurgence in COVID-19 and reduce the impact of lockdown measures on production and life. Currently, production and life in most regions are back on track, economic operations are generally stable, and the impact of COVID-19 is controllable. Of course, we will continue to work hard and keep economic operations within a reasonable range. In response to your question about our investment and consumption policies, we will follow the instructions put forward during the fifth plenary session of the 19th CPC Central Committee as well as the Central Economic Work Conference, implement our financial, monetary, employment, investment, consumption, regional, and industrial policies more precisely, overcome difficulties that arise, keep economic operations within a proper range, and promote the sustainable and healthy development of China's economy.
In general, consumption and investment played key roles in economic development in 2020. The overall fixed-asset investment, investment in the tertiary industry, and investment in the social sector and infrastructures all achieved positive growth. In 2021, we will continue to increase our investment in areas of weakness. Following the instructions of the Central Economic Work Conference, we will ensure to balance investment in both strong and weak areas and boost the overall quality of our investment.
Imports and exports bucked the trend and increased last year. The GACC held a press conference two days ago to introduce the situation. Imports and exports in the first two quarters of last year were severely affected by COVID-19 but a series of effective measures were later adopted to tackle the issues. In addition, China's relatively complete industrial system ensures logistics services and meets the demands of epidemic prevention products, household goods, and office supplies for some countries in the world. Because of the advantages that I have just introduced, China's imports and exports rebounded in the third and fourth quarters and the economy achieved positive growth throughout the year. This year, the coronavirus has continued to spread globally and nations around the world have relatively large demands for epidemic prevention products and daily necessities. Based on boosting domestic demand, we should also meet the needs of foreign markets and expand external demand. It is expected that imports and exports will maintain current momentum. Thank you.
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