0 Comment(s)
Print
E-mail China.org.cn, February 25, 2025
TASS:
Since last September, China has introduced a series of policies, including those promoting consumption and investment. How have these policies been reflected in the economic data? And what role did they play in achieving the annual goals and tasks? Thank you.
Kang Yi:
Thank you for your questions. In 2024, the course of China's economic development has been extraordinary. The first quarter started well, but in the second and third quarters, economic pressures increased, and some new situations and problems emerged. Faced with these new situations and problems, the CPC Central Committee with Comrade Xi Jinping at its core assessed the situation and took decisive action. On Sept. 26, the meeting held by the Political Bureau of the CPC Central Committee made significant arrangements to effectively implement existing policies and introduce new policies, greatly boosting confidence, improving expectations and stimulating development momentum. The economy showed a significant rebound in the fourth quarter. According to preliminary data, GDP in the fourth quarter grew by 5.4% year on year, accelerating by 0.8 percentage point compared to the third quarter, making a decisive contribution to achieving the expected annual economic growth target. According to the performance of key indicators such as production, demand, prices, incomes and expectations, positive changes have occurred in all aspects.
First, consumption and investment are accelerating. In terms of consumption, the total retail sales of consumer goods in the fourth quarter increased by 3.8% year on year, 1.1 percentage points faster than that in the third quarter, which recorded only 2.7% growth. Consumer goods trade-in policies have driven an increase, with retail sales of household appliances and audiovisual equipment, furniture, automobiles, and building as well as decoration materials by units above the designated size in the fourth quarter collectively having boosted the total retail sales of consumer goods by around 1 percentage point. In terms of investment, driven by the "two major" projects and large-scale equipment renewals, infrastructure investment in 2024 grew by 4.4%, accelerating by 0.3 percentage point compared to the first three quarters; and investment in equipment and tools procurement grew by 15.7%, accelerating by 9.1 percentage points compared to the previous year, driving total investment growth by 2.2 percentage points.
Second, the industrial and service sectors have rebounded significantly. The expansion of market demand has promoted increased industrial production and accelerated the growth of the service industry. In terms of the industrial sector, the value-added of industries above designated size in the fourth quarter increased by 5.7% year on year, 0.7 percentage point faster than that in the third quarter. Among them, the value added of equipment manufacturing enterprises above designated size increased by 8.1% due to equipment renewal policies, accelerating by 1.1 percentage points compared to the third quarter. Capacity utilization is also improving, with the capacity utilization rate of industrial enterprises above designated size reaching 76.2% in the fourth quarter, increasing by 1.1 percentage points from the third quarter. In terms of the service industry, the value added in the fourth quarter increased by 5.8% year on year, 1 percentage point faster than the third quarter. Among them, the value added of wholesale and retail trade increased by 5.7%, transportation, storage and postal services by 7.9%, and financial services by 6.5%, accelerating by 0.7, 1.3 and 0.3 percentage points, respectively. The value added of the real estate industry turned from a 1.2% decline in the third quarter to a 2% increase, shifting from negative to positive.
Third, the price situation has shown positive changes. Market demand recovered, driving up prices. In terms of consumer prices, CPI growth rate in the fourth quarter declined to some extent, mainly due to the decrease in food prices. The core CPI, which better reflects the supply and demand relationship, has continuously risen. Since the fourth quarter, the core CPI, excluding food and energy, has increased for three months consecutively, rising 0.4% in December. Regarding prices of industrial products, improvements in industrial production and sales have also led to price stabilization. The PPI decline narrowed for two consecutive months in November and December, by 0.4 and 0.2 percentage points, respectively, compared to the previous month.
Fourth, business, resident and government incomes have been improving. The economic recovery has improved the income situation of businesses, residents and the government. In 2024, the national per capita disposable income of residents increased by 5.1% in real terms compared to the previous year, accelerating by 0.2 percentage point compared to the first three quarters. The profitability of enterprises is also improving slightly. In October and November, the year on year decline in total profits of industrial enterprises above designated size continued to narrow, decreasing by 17.1 and 2.7 percentage points, respectively, compared to the previous month. Fiscal revenue has also gradually been improving. Since September, the growth rate of fiscal revenue has turned positive, and improved month by month in October and November.
Fifth, market activity has been increasing. The combined effects of policies continue to be released, resulting in increased activity in the stock and real-estate markets, an accelerated growth in freight volume, greater money supply, and improved momentum of economic development. In the fourth quarter, the sales area and sales value of newly built commercial housing achieved positive year-on-year growth; and the trading volume and trading value of stocks in the Shanghai and Shenzhen markets increased by 1.1 times and 1.6 times, respectively, compared to the third quarter. The annual freight volume increased by 3.9% compared to the previous year, with the growth rate accelerating by 0.6 percentage point compared to the first three quarters. At the end of December, the broad money (M2) balance increased by 7.3% year on year, accelerating by 0.5 percentage point compared to the end of September.
Sixth, market expectations have been improving. The improving economic performance has driven rising confidence across various sectors. Since the fourth quarter, the purchasing managers' index (PMI) of the manufacturing industry and the service business activity index have both remained above the 50% prosperity threshold. In December, the production and business activity expectation index of the manufacturing industry was 53.3%, and the service business activity expectation index was 57.6%, both being at relatively high levels.
Looking at the main indicators from December in particular, the economic recovery trend is more evident. In December, the value added of industrial enterprises above designated size, the index of services production, and the total retail sales of consumer goods increased year on year by 6.2%, 6.5% and 3.7%, respectively, accelerating by 0.8, 0.4 and 0.7 percentage points from the previous month. Among them, the industrial growth rate is the highest it has been in the second half of the year, the growth rate of the service industry production index is at its highest point for the year, and the production-sales ratio of industrial enterprises above designated size has also risen to a high level of 98.7%.
Overall, the package of incremental policies introduced after the meeting of the Political Bureau of the CPC Central Committee on Sept. 26 effectively stimulated development vitality, expanded market demand, boosted enterprise production, enhanced market activity and strengthened development confidence. These measures played a decisive role in the fourth quarter's economic recovery and the successful achievement of annual targets. Going forward, we will implement the guiding principles of the Central Economic Work Conference, carry out more proactive and effective macro policies, and ensure a smooth and orderly transition of relevant policies between years to provide stronger support for stable economic operations and sustained recovery.
Thank you.
Go to Forum >>0 Comment(s)