SCIO briefing on China's economic performance in first quarter of 2023
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E-mail China.org.cn, April 28, 2023
CCTV:
The Chinese economy has stabilized and rebounded in the first quarter of this year. What are the main features? What is your assessment of the economy in the first quarter? Thank you.
Fu Linghui:
I know there is a lot of interest in China's economic performance in the first quarter. Since the beginning of this year, all regions and government departments have thoroughly implemented the decisions and plans of the Central Committee of the Communist Party of China and the State Council, given priority to stability, sought progress while maintaining stability, promoted high-quality development, and made great efforts to ensure steady growth, employment, and prices. We have adopted proactive and effective macro policies, and made steady and quick shifts in terms of epidemic prevention and control. Work and life have been returning to normal at a faster pace, production and demand have stabilized and rebounded, jobs and prices have become basically stable, business expectations have significantly improved, positive factors have been cumulatively increasing, and the economy has gotten off to a good start. The main features are as follows.
First, economic growth has stabilized and rebounded. In the first quarter, GDP grew by 4.5% year on year, 1.6 percentage points higher than that of the fourth quarter of last year and 2.2% up from the previous quarter. It has grown faster than in the past. Agriculture has maintained steady growth. Preparation for spring planting has been advancing in an orderly manner. Animal husbandry has grown steadily, and agricultural production has remained stable. In the first quarter, the value added of agriculture, forestry, animal husbandry, and fisheries increased by 3.8% year on year, and the output of pork, beef, mutton, and poultry meat increased by 2.5%. Industrial production has recovered steadily. In the first quarter, the value added of industrial enterprises above designated size increased by 3% year on year, 0.3 percentage points higher than that in the fourth quarter of last year. The service sector has witnessed a marked rebound in growth rate. In the first quarter, the value added of the service sector grew 5.4% year on year, 3.1 percentage points higher than that in the fourth quarter of last year. The service sector, with face-to-face engagements among a significant number of people, previously hit hard by COVID-19, has especially recovered very fast.
Second, domestic demand has been expanding. Market sales have turned to increase. More opportunities and greater expectations to spend have driven market sales to expand and consumer spending in the service sector to rebound notably. In the first quarter, the total retail sales of consumer goods rose 5.8% from a year earlier, compared with a 2.7% decrease in the fourth quarter of last year. Retail sales in the service sector have demonstrated a good recovery momentum, of which catering revenue rose 13.9%. Investment has grown steadily. In the first quarter, fixed asset investment increased by 5.1% year on year, on par with the whole of last year. Among them, infrastructure investment and manufacturing investment grew by 8.8% and 7%, respectively.
Third, jobs and prices have remained basically stable. The employment situation has improved. In the first quarter, the surveyed urban unemployment rate averaged 5.5%, down 0.1 percentage points from the fourth quarter of last year. The surveyed urban unemployment rate in March was 5.3%, down 0.3 percentage points from February. Consumer prices rose moderately, and the supply of goods and services in the market was on the whole sufficient. In the first quarter, consumer prices rose by 1.3% year on year, maintaining a moderate rise. Excluding food and energy, the core CPI rose 0.8% year on year, unchanged from that of the first two months and thus basically stable.
Fourth, solid progress has been made in high-level opening up. We have vigorously stabilized and improved foreign trade, and actively expanded trade with emerging markets and developing countries, including those along the Belt and Road. China's foreign trade has continued to show its resilience. In the first quarter, China's trade volume of goods increased by 4.8% year on year, and the trade volume of goods with countries along the Belt and Road increased by 16.8% year on year, a rapid growth. China's foreign trade has shown its resilience in a complex and grim external environment. In the first two months, China's actual use of foreign capital increased by 6.1%, among which, that of high-tech industries increased by 32%.
Fifth, transformation and upgrading have continued, and new drivers of growth have continued to grow. In the first quarter, investment in high-tech industries grew by 16% year on year, significantly outpacing overall investment growth. In the first quarter, online retail sales of physical goods increased by 7.3% year on year, accounting for 24.2% of the total retail sales of consumer goods. Green and low-carbon products have grown rapidly. In the first quarter, the output of new-energy vehicles and solar cells increased by 22.5% and 53.2%, respectively. Consumer spending has shown a significant leading role. In the first quarter, the contribution of final consumption expenditure to economic growth reached 66.6%, higher than that of gross capital formation.
Sixth, market vitality has been growing, and expectations of business entities have improved. In March, manufacturing PMI was 51.9%, staying above 50% for three months consecutively. The non-manufacturing business activity index was 58.2%, up 1.9 percentage points from the previous month and reaching a relatively high level in recent years, and the business activity index of the service sector rose to 56.9%. People flow and logistics have gained steam. In the first quarter, cargo volume increased by 5% year on year, and passenger volume increased by 26.3%. Railway passenger volume and civil aviation passenger volume increased by 67.7% and 68.9%, respectively. The operation performance of small and micro businesses has improved. In the first quarter, the value added of small and micro enterprises above the designated size increased by 3.1%, faster than the growth of all industrial enterprises above the designated size, and the index gauging the prosperity of small and micro enterprises picked up from the fourth quarter of last year.
It is not easy to make such progress in a complex and grim international environment, and it is important to see that the external environment is complex, the global economy is markedly slowing, there are a lot of factors of instability and uncertainty, and despite the recovery and rebound, the domestic economy still faces an obvious lack of demand and prominent structural issues, which requires us to further consolidate the foundation for a rebound. Going forward, we will fully implement the guiding principles of the Central Economic Work Conference and the plans in the Government Work Report, adhere to the general principle of seeking progress while ensuring stability, implement macro policies in a systemic and targeted way, unleash the potential of domestic demand, deepen reform, opening up, and innovation, push for a sustained overall economic recovery, and strive for improvements in quality and growth in quantity.
Thank you.
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