SCIO briefing on China's economic performance in 2022
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E-mail China.org.cn, February 3, 2023
CCTV:
China's economy was affected by multiple factors beyond expectations in 2022, including the international situation, domestic COVID-19 outbreaks, high temperatures and drought. What's your view on the performance of China's economy in 2022? Moreover, China's GDP surpassed 120 trillion yuan in 2022, so what does that mean for the Chinese economy? Thank you.
Kang Yi:
Thank you for your questions. It is indeed very important to review the past year. In 2022, we faced profound changes and a pandemic, both unseen in a century, the geopolitical situation was volatile and unstable, and downward risks in the global economy increased. Meanwhile, the domestic economy was affected by multiple factors beyond expectations, including sporadic resurgences of COVID-19 and extremely high temperatures. Moreover, the triple pressure of demand contraction, supply shocks and weakening expectations continued to evolve. Furthermore, the environment for development became more complicated, challenging and uncertain. Confronted with a complex and volatile international environment and formidable tasks in promoting reform, development, and stability at home, the CPC Central Committee with Comrade Xi Jinping at its core united and led the whole Party and Chinese people of all ethnic groups in rising to these challenges head-on and dealing with them calmly, considering both domestic and international dynamics, coordinating the COVID-19 response with socioeconomic development, ensuring both development and security, and stepping up macro regulation, and as the result, the impact of factors beyond expectation has been handled effectively, the overall performance of the macroeconomy has been stabilized, new achievements have been made in high-quality development, people's basic living needs have been ensured through more effective efforts, and overall economic and social stability has been maintained. Overall, the economy's performance in 2022 can be generalized in the following aspects.
First, China's composite national strength has been further strengthened. In 2022, China's GDP exceeded 120 trillion yuan, standing at 121 trillion yuan. After consecutively surpassing 100 trillion yuan in 2020 and 110 trillion yuan in 2021, China's GDP in 2022 reached a record high of 120 trillion yuan, or $18 trillion in U.S. dollar terms, according to the annual average exchange rate. China maintained its position as the world's second-largest economy. China's per capita GDP in 2022 reached 85,698 yuan, up 3% in real terms, amounting to $12,741, according to the annual average exchange rate. China's per capita GDP has exceeded $12,000 for two years in a row. The constant increase in China's GDP in both aggregate and per capita terms means a further enhancement in China's composite national strength, social productivity, international influence and people's living standards, which means a more solid foundation, higher quality, and greater momentum for development. Moreover, it demonstrates the Chinese economy's strong resilience, vast potential and ample space, and the fact that the fundamentals sustaining China's sound economic growth, in the long run, remain unchanged. Surely, it also means that we should continue to work with greater effort. The country's long-range goal for 2035 is to increase per capita GDP to the level of moderately developed countries. At present, the per capita GDP is only $12,700. The GDP needs to more than double to reach this medium-term goal. Therefore, 120 trillion yuan of GDP is only a small step on our way forward.
Second, the economy has remained generally stable. Economic growth was faster than most major economies. Early in the second quarter, affected by some factors beyond expectations, China faced an economic downturn. The CPC Central Committee and the State Council promptly adopted a package of policies to stabilize the economy, making great efforts to support the economy to withstand pressures and to firm up. Just now, I have reported to you that last year China's GDP grew by 3%, which is a fast growth rate compared with major economies in the world. For instance, Germany has announced its projected annual economic growth rate of 1.9%. According to the IMF, the economic growth rate of the U.S. and Japan in 2022 will not exceed 2%. China's GDP growth of 3% is relatively rapid, considering China has suffered shocks of many factors beyond expectation. In addition, overall stability was maintained in employment. A total of 12.06 million new urban jobs were created over the year, surpassing the projected target of 11 million new jobs. At the end of December, the surveyed urban unemployment rate stood at 5.5%, down 0.2 percentage points from the previous month. The consumer price index registered a moderate rise of 2% over the year. As global food and energy prices rose drastically and imported inflationary pressures increased, the stable prices in China contrasted sharply with the high inflation in major economies such as the U.S. and European countries. The balance of payments has been improved. The total volume of trade surplus in goods rose by 35.4% over the previous year; China's foreign exchange reserves reached $3.1277 trillion at the end of year, ranking first in the world.
Third, a solid foundation has been laid for industrial development. The agricultural sector has seen an increase in output and successful harvests. Moreover, a bumper food harvest has been secured for the 19th year in a row. The grain output totaled 686.55 million metric tons and has been kept above 650 million metric tons for eight consecutive years, putting us in a stronger position to ensure the food supply of the Chinese people. Meantime, industry has fully played its role as a ballast stone. The total industrial value added reached 40.2 trillion yuan and the value added by the manufacturing sector stood at 33.5 trillion yuan, leading the world. Industry's contribution to economic growth reached 36%. Infrastructure has been increasingly improved. As of the end of 2022, China's rail network in operation has grown to 155,000 kilometers, including 42,000 km of high-speed railways, leading the world. The world's largest internet infrastructure with world-leading technologies has been built and the industrial internet has been widely integrated into 45 categories of the national economy.
Fourth, domestic demand continued to expand. Despite the shocks of several rounds of COVID-19 resurgences, the total annual retail sales of consumer goods were stable at around 44 trillion yuan, with online retail sales reaching 12 trillion yuan. China is still the second-largest consumer market and largest online retail sales market in the world, with distinctive advantages in its huge market. The total investment in fixed assets exceeded 57 trillion yuan, up 5.1% over the previous year, 0.2 percentage points higher than that of 2021, providing strong support for sustained economic growth.
Fifth, reform and innovation have been deepened. Reforms to streamline administration and delegate power, improve regulation, and upgrade services have been advanced. The business environment has been improved. Moreover, steady progress has been made in the comprehensive pilot reform for the market-based allocation of production factors. In addition, the development of the high-standard market system has been accelerated. All these have contributed to creating a more favorable condition for the development of market entities. By the end of 2022, the number of market entities registered nationwide reached 169 million, including 114 million self-employed businesses. The innovation-driven development strategy has been further implemented and new development momentums have been playing an increasingly prominent role in driving growth. In 2022, the total value added of the high-tech manufacturing enterprises above designated size grew by 7.4% over the previous year, 3.8 percentage points higher than that of the industrial enterprises above designated size as a whole. Meanwhile, online retail sales of physical goods accounted for 27.2% of total retail sales of consumer goods, with a year-on-year increase of 2.7 percentage points.
Sixth, solid steps have been taken to advance high-standard opening up. Confronted with increasing downward pressure on the world economy and a slowdown in global trade growth, we have advanced high-standard opening up at a faster pace and supported enterprises to maintain production, receive orders and expand the market, achieving rapid growth in foreign trade and foreign investment. The total value of trade in goods reached a record high. In 2022, the total value of trade in goods exceeded 40 trillion yuan, reaching 42.1 trillion yuan, up 7.7% over the previous year. Trade in services grew rapidly. From January to November, the total volume of service trade stood at 5.4 trillion yuan, up 15.6% year on year. Inbound foreign investment grew in a trend-bucking manner. Bright economic development prospects and an increasingly optimized business environment made China a fertile ground for global investment and entrepreneurial pursuits. From January to November, China's utilized foreign investment amounted to 1.1561 trillion yuan, with a year-on-year increase of 9.9% calculated on a comparable basis, surpassing the whole year's total value of utilized foreign investment in 2021, hitting a record high.
Seventh, strong and effective measures have been taken to ensure people's livelihoods. We have remained committed to ensuring and improving people's livelihoods through development, using every possible means to boost personal incomes, consistently increasing investment in improving people's living standards, and taking practical measures to meet people's basic living needs. Personal incomes have grown steadily. In 2022, per capita disposable income of residents increased by 2.9% in real terms, which stayed basically in step with economic growth. The government provided stronger support to ensure personal incomes, with a year-on-year nominal increase of 5.5% in per capita net transfer income, higher than the growth rate of total personal incomes. Investment in improving people's livelihoods was increased and social sector investment in 2022 went up by 10.9% year on year, among which investment in health and social work was up by 26.1%, an increase of 6.6 percentage points over the previous year.
People can't know how difficult things can be until they have experienced them. Under the complicated circumstances of profound changes and a pandemic both unseen in a century and faced with shock caused by many unexpected factors, it is only by overcoming enormous difficulties that China has been able to make such achievements. We owe our achievements last year to the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, the sound guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, and the concerted efforts of the Party and Chinese people of all ethnic groups. These achievements speak volumes about the marked advantages of the system of socialism with Chinese characteristics and the strong resilience and vitality of the Chinese economy.
While fully recognizing our achievements, we also need to acknowledge that the international situation is undergoing complex changes, the global growth momentum is weakening, global trade faces grim challenges, and the world economy may suffer from stagflation. Domestically, the foundation for economic recovery is still not solid and enterprises still face many difficulties in their production and operations. Our capacity for scientific and technological innovation still needs to be further developed. Moreover, people still face many difficulties in seeking jobs. More intensive efforts are required to promote overall improvement in the economy.
Thank you.
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