People's Daily front page article: How to view China's economic recovery as "wave like development and tortuous progress"

Reading the semi annual report of the Chinese economy, the gross domestic product (GDP) increased by 5.5% year-on-year. The recovery trend of the Chinese economy has attracted widespread attention both domestically and internationally.

We need to take a comprehensive, dialectical, and long-term perspective, both vertically and horizontally. In international comparisons, we should deeply understand this strategic judgment and have firm confidence in doing a good job in the economic work of the second half of the year.

Check grades——

The national economy continues to recover, with an overall recovery and improvement, and high-quality development is solidly promoted

To deeply understand the "wave like development and tortuous progress" of China's economic recovery, it is first necessary to analyze and see the highlights of economic operation.

Sorting out the transcripts of the first half of the year, the performance of the "new three samples" in foreign trade was impressive.

The total export of electric passenger vehicles, lithium-ion batteries, and solar cells in foreign trade increased by 61.6%, driving an overall export growth of 1.8 percentage points. Behind the numbers is the accelerated improvement of quality and efficiency in foreign trade, the accumulation of industrial upgrading, and the strong momentum of "China's intelligent manufacturing".

Take new energy vehicles as an example. On July 3rd, China's 20th millionth new energy vehicle was taken offline from the production line of Guangzhou GAC Aian. It took 27 years from the first vehicle to the 10th million vehicle; It only took 17 months from the 10th to the breakthrough of 20 million vehicles. In the Yangtze River Delta, 5 new energy vehicles were assembled in 1 minute; Within a 4-hour drive, a new energy vehicle factory can provide the necessary supporting components.

More than half of the world's new energy vehicles are driven in China. According to the American news website Acxios, thanks to policy support, healthy competition, and a consumer market that is willing to accept emerging technologies, China's new energy vehicle industry has developed rapidly and achieved a highly competitive transformation in just a few years.

The real economy is the capital of China's development. Provide 50% of wind power equipment and 80% of photovoltaic module equipment to the world, greatly reducing the utilization cost of renewable energy globally; The first domestically produced large cruise ship has successfully completed its first trial voyage, the world's largest river sea intermodal liquefied natural gas carrier has been delivered, and the Fujian ship has been launched for one year. The "three pearls" of the shipbuilding industry are shining brightly. The high-end, intelligent, and green development of the manufacturing industry has taken new steps, and the modern industrial system with independent control, safety, reliability, and strong competitiveness has made new progress. This "cost" is becoming increasingly heavy.

Green development was another prominent highlight of China's economy in the first half of the year.

Look at a big river. In Yidu, Hubei Province, chemical plants have retreated from the Yangtze River to industrial parks to jointly promote large-scale protection and avoid large-scale development; In Yueyang, Hunan, fishermen transform into fish guards; In Tongling, Anhui, the finless porpoise can also be seen in the clear water. The ten-year fishing ban on the Yangtze River has achieved phased results, and the water quality of the main stream has remained Class II for three consecutive years.

In the first half of the year, the overall air quality excellence rate in China remained at a high level; The proportion of sections with excellent water quality increased by 2.1 percentage points year-on-year; The energy consumption per unit of GDP decreased by 0.4% year-on-year. The sky is bluer, the ground is greener, the water is clearer, and the green content of development is higher, with colorful rivers and mountains covering thousands of miles.

The reasonable increase in quantity solidifies the foundation of stability, and the effective improvement in quality stimulates the momentum of progress. There are still many highlights worth savoring in the mid year inventory.

For example, the cultural and tourism market is behind the rising box office of domestic films.

In the first half of the year, the national box office increased by 52.9% year-on-year, and the number of viewers increased by 51.8%; As of August 18th, the total box office of the 2023 summer season reached 17.8 billion yuan, with the top six domestic films in terms of box office revenue. The popularity of movies is accompanied by the popularity of cultural tourism and check-in, and new experiences are expanding consumption scenarios. In the first seven months, the total retail sales of consumer goods in society increased by 7.3% year-on-year, while the retail sales of services increased by 20.3% year-on-year. The screen light and shadow, both inside and outside the cinema, reflect the flourishing development of the cultural and tourism industry, and highlight the vitality of the consumer market.

For example, the new momentum of openness stimulated by the "acceleration run" of the China Europe freight train.

"From small commodities to large machinery and equipment, everything can be transported," said Du Mou, the chief dispatcher of Yiwu West Station, proudly. On July 29th, the X8020 China Europe freight train departed from Yiwu West Station and headed towards Madrid, Spain. So far this year, a total of 10000 China Europe freight trains have been operated. In the first seven months, China's imports and exports to countries along the "the Belt and Road" totaled 8.06 trillion yuan, up 7.4%; The total value of trade with ASEAN was 3.59 trillion yuan, an increase of 2.8%. The steel camel caravan, galloping endlessly, opens up international logistics channels, and drives the economic recovery and improvement of the regions along the route.

One by one, "new highlights" confirm the unquestionable "absolute results". This year's total summer grain production is 292.3 billion catties, with a national early rice production growth of 0.8%. The added value of industrial enterprises above designated size increased by 3.8% year-on-year in the first seven months, and the service industry production index increased by 5.7% year-on-year in July. The three industries have steadily developed; In the first half of the year, 6.78 million new jobs were created in urban areas, and the per capita disposable income of residents increased by 5.8% in real terms. People's living standards continued to improve.

The extremely difficult "relative achievements" are another window for observing the Chinese economy.

Accelerate the filling of gaps and unleash huge demand.

In the first half of the year, 42600 old urban communities were newly renovated, benefiting 7.42 million households; Since 2021, more than 2300 rural revitalization demonstration villages have been built in poverty-stricken areas by eastern provinces and central units. Shortcomings are also potential. Regional coordination and urban-rural integration provide space for industrial re layout and gradient transfer, but China is still in a stage of rapid release of total demand.

Play the first move well and prevent and resolve risks.

Continuously promoting mergers and acquisitions of small and medium-sized banks; Strictly implement the lifelong accountability system for government borrowing; Continue to do a good job in ensuring the delivery of buildings and accelerate project construction and delivery... Secure the bottom line of safety and assist in stable development.

"In line with expectations, it's hard won." The main person in charge of the National Development and Reform Commission stated that the national economy continues to recover, the overall recovery is improving, and high-quality development is solidly advancing. This is achieved in the context of weak external demand, increasing adverse effects of international environmental changes on me, interweaving and overlapping domestic cyclical structural contradictions, and gradually emerging risks and hidden dangers in some fields.

See resilience——

Compared in the global coordinate system, it is more evident that the Chinese economy has tremendous development resilience and potential, and the long-term positive fundamentals have not changed

To deeply understand the "wave like development and tortuous progress" of China's economic recovery, it is necessary to observe from a global "coordinate system" perspective.

"The global economy is recovering from the impact of the COVID-19 epidemic and the Russia-Ukraine conflict, but it has not yet gone out of the woods." Pierre Olivier Gulanshatan, chief economist of the International Monetary Fund, said.

In international comparison, it is commendable that China's economy has rebounded and improved.

——With a global leading growth rate of 5.5%, the "China answer sheet" is full of value.

The external environment is complex and severe. Observing the performance of other regions, the GDP of the Eurozone increased by 0.6% year-on-year in the second quarter, the GDP of the European Union increased by 0.5% year-on-year, and the GDP of the United States increased by 2.4% at an annual rate. "Even considering the situation in the second quarter, China's economic growth rate in the first half of the year was still the fastest among major economies," said Fu Linghui, spokesperson for the National Bureau of Statistics.

Let's take another look at the comparison. The World Bank expects the global economic growth rate to be 2.1% in 2023, a decrease of 1 percentage point year-on-year. The International Monetary Fund predicts that China's economic growth rate is expected to reach 5.2% this year, and China's contribution to global economic growth will reach about one-third.

Looking around the world, China's economy has multiple advantages and conditions for continued development.

Strong resilience, the Chinese economy is a vast ocean, not a small pond.

The C919 domestically produced large aircraft has launched its first "dual aircraft commercial operation"; The first domestically produced F-class 50 MW heavy-duty gas turbine has been officially put into commercial operation; The large amphibious aircraft "Kunlong" has the ability to carry out firefighting missions... China has remained the world's second largest economy and the largest industrial country, with its manufacturing scale ranking first in the world for 13 consecutive years. Its economic strength, technological strength, and comprehensive national strength have reached a new level.

There is great potential, and the Chinese market has huge space and broad prospects.

In the Suyin Industrial Park in Yinchuan, Ningxia, the Baofeng Battery Energy Storage Project with a total investment of over 30 billion yuan is bustling on site. Promote the experience of Suzhou Industrial Park and accelerate the growth of a clean energy industry cluster worth billions of yuan. Significant progress has been made in coordinated development, with the proportion of GDP in the central and western regions of China increasing from 21.3% and 19.6% in 2012 to 22.1% and 21.4% in 2022.

China has abundant vitality and strong development momentum.

Airbus will build a second production line in Tianjin, and BMW's sixth generation power battery project will start construction in Shenyang. In the first half of this year, the number of newly established foreign-invested enterprises increased by 35.7%. As of now, there are a total of 12000 specialized and innovative "little giant" enterprises; In April, the number of registered private enterprises exceeded 50 million.

——The core CPI growth rate is basically stable, and the stable and abundant supply of "rice bags," "vegetable baskets," and "fruit plates" are the most basic and important livelihood and economic foundation.

The consumer price index of residents increased by 0.7% year-on-year in the first half of the year. In July, the CPI increased by 0.2% month on month, marking the first time in nearly 6 months that it had turned positive; Compared to the previous month, it remained unchanged and decreased by 0.3%. How to view the low growth rate of China's CPI?

"The weak recovery of the world economy is due to the high international oil price base and cyclical fluctuations in pork prices. Domestic gasoline, diesel, and pork prices have decreased by 13.5% and 26% year-on-year, respectively, which is an important reason for the low CPI in July." Fu Linghui said. On the other hand, excluding food and energy, the core CPI increased by 0.8% year-on-year, an increase of 0.4 percentage points compared to the previous month, indicating that consumption, especially service consumption, continues to recover.

Dialectically speaking, the core CPI increase is basically stable, and prices have always maintained a stable operation, ensuring the safety and well-being of thousands of households in their daily lives. Wen Bin, Chief Economist of China Minsheng Bank, believes that the CPI in July showed characteristics of "strong month on month, weak year on year" and "weak food and strong services". The strong month on month is due to the rebound in energy prices and the recovery of core CPI month on month, while the weak year on year is mainly due to a significant increase in the base last year. The weak food supply is related to seasonal factors, abnormal weather conditions, and increased imports of agricultural products, while the strong service reflects a rebound in demand for cultural tourism and other related products among residents. The core CPI is expected to remain stable and gradually return to a reasonable level driven by the rebound in consumer demand among residents.

Compared to China's stable prices, countries in the United States and Europe are experiencing a rare high inflation in decades, while some developing countries are struggling with debt.

The IMF expects the overall global inflation level to remain at 6.8% this year. The overall inflation rate in the Eurozone in June was 5.5%, far higher than the 2% inflation warning line set by the European Central Bank. According to the report of the Nihon Keizai Shimbun, the common difficulties faced by local enterprises are the rising costs and the shortage of labor force caused by high prices.

Macro stability is a scarce resource. "China continues to promote high-quality development, providing more stability and certainty for the turbulent world," said Mwangji Vajila, former economist at the World Bank.

The two rice bowls are firmly held. Grain prices are the foundation of a hundred percent price, and the strictest farmland protection system has been implemented to win the battle for the revival of the seed industry. The planned planting area of grain in China is over 1.77 billion mu. With a bountiful summer harvest, the economy will be at its bottom throughout the year. Energy is the grain of industry, stabilizing the "ballast stone" of coal, increasing oil and gas storage and production, and forming a diversified clean energy supply system. With strong energy security, the economy will operate smoothly.

The supply advantage has been further strengthened. In one minute, 110 flexible display screens were produced in Chengdu, and 45 refrigerators, 50 washing machines, and 64 air conditioners were manufactured in Hefei. We have the most complete industrial system, complete supporting capabilities, and an increasingly complete infrastructure network. In the first half of the year, out of 620 major industrial products, 331 achieved an increase in production, with a growth rate of over 50%. This laid a solid foundation for stabilizing domestic prices and also contributed to stabilizing global prices.

——The import and export scale has exceeded 20 trillion yuan for the first time in the same period in history, withstanding pressure and stabilizing the scale.

The port is the best place to touch the pulse of foreign trade. The photovoltaic special train from Hangzhou slowly enters Ningbo Port and orderly transfers to Jakarta, Indonesia. In the first half of the year, Ningbo Zhoushan Port completed a cargo throughput of 679 million tons, a year-on-year increase of 6%. As of 2022, the annual cargo throughput of Ningbo Zhoushan Port has ranked first in the world for 14 consecutive years.

This first one is not easy.

Global demand is weak. Take the daily mobile phone as an example, the global smartphone market decreased by 10% year-on-year in the second quarter. The global market is weak, and China has also been affected. In the first half of the year, China's smartphone shipments reached 124 million units, a year-on-year decrease of 7%.

The World Trade Organization predicts that global trade in goods is expected to grow by 1.7% this year, significantly lower than the average level of 2.6% in the past 12 years; The global manufacturing PMI new export order index continues to be in a contraction range. Research shows that the World Open Index has been continuously declining over the past decade.

In the context of insufficient global economic growth momentum, the Chinese economy is carrying a heavy burden and injecting certainty into the uncertain world through its own sustained and stable development. Since the second quarter, China's monthly import and export scale has remained stable at over 3.4 trillion yuan, and the share of exports in the international market has remained basically stable.

"We are determined to expand our opening-up to the outside world and expand our economic and trade exchanges with countries around the world on the basis of mutual benefit and win-win results. The results of high-level opening-up are constantly emerging," said a researcher at the Shanghai Academy of Social Sciences.

Looking at the future——

Highlighting stability, strengthening progress, and achieving excellence, we have the confidence, conditions, and ability to achieve the annual economic and social development goals and tasks with high quality

To deeply understand the "wave like development and tortuous progress" of China's economic recovery, the key is to strengthen confidence, overcome difficulties, and do a good job in the current work. On the one hand, we should recognize that development and progress are the mainstream, and on the other hand, we should be prepared to deal with waves and twists and turns.

Economic development has never been smooth sailing, and the Chinese economy has always grown and strengthened through overcoming difficulties. This is both a historical law and an economic law.

Adhere to the overall tone of "seeking progress while maintaining stability", anchor the goal of "promoting effective improvement in quality and reasonable growth in quantity of the economy", avoid causing headaches and foot pain, and prevent flooding. Analysts have stated that this "construction drawing" is a continuous and gradual process, focusing on key issues and pursuing long-term goals, reflecting the unity of strategic determination and strategic vitality.

Confidence is more precious than gold. Facing difficulties and implementing precise strategies will straighten the question marks one by one.

——Focus on expanding domestic demand.

Insufficient total demand is indeed a prominent contradiction facing the current economic operation.

Looking at consumption, the market sales growth in the first half of the year was good, but the year-on-year growth rate of total retail sales of consumer goods in June and July has declined. Can consumption continue to recover?

"After the normal operation of the economy and society has resumed, contact and service-oriented consumption has taken the lead in recovering. However, the impact and impact caused by the epidemic cannot be completely eliminated in the short term, and the endogenous driving force of consumption still needs to be further strengthened." Zou Yunhan, Deputy Director of the Macro Department of the Economic Forecasting Department of the National Information Center, analyzed.

Combine the implementation of the strategy of expanding domestic demand with deepening supply side structural reform, fully leverage the role of consumption as the "main engine", and enable residents to consume, dare to consume, and be willing to consume.

Night tour of Meilin Ancient Town and check-in at Hakka Night Market, Ganxian District, Ganzhou City, Jiangxi Province, with a hot trend of cultural and tourism integration. "On May Day, 3 million yuan of consumption vouchers were issued, driving 50 million yuan of consumption. In the second half of the year, we will continue to transform night markets, explore traditional culture, and expand consumption patterns," said Xie Qiang, Deputy Director of the Ganxian District Bureau of Commerce.

Supporting the development of new energy vehicles in rural areas. Since the beginning of this year, various regions have planned to invest over 2.5 billion yuan in promoting household appliance consumption, adding fuel and fuel to the recovery of bulk consumption; Strengthen financial support, optimize the approval process for performance and competition activities, take real actions, and safeguard the upgrading of service consumption; 16 measures are taken to encourage and guide the healthy development of "village BA" and "village supermarket", actively develop the green and low-carbon consumption market, and take practical measures to create a trend for the development of new consumption.

In terms of investment, fixed assets investment in China increased by 3.4% year on year in the first July, but the growth slowed down. Can the key role of investment still be played?

Tracing back to the source. In the first seven months, investment in manufacturing and infrastructure increased by 5.7% and 6.8% year-on-year, respectively, but investment in real estate development decreased by 8.5% year-on-year. "The slowdown in investment is mainly affected by real estate development investment, and infrastructure and manufacturing investment still make a significant contribution to economic growth," said Liu Lifeng, a researcher at the Investment Research Institute of the China Academy of Macroeconomics.

Provide targeted prescriptions. "From the demand side, the orderly release of rigid and improved reasonable housing demand will continue to drive the development of real estate; from the supply side, as the phased adjustment of the real estate market gradually arrives, supply will also tend to stabilize, and real estate investment will gradually return to a reasonable level." Fu Linghui believes.

Dig deep into potential. At present, the per capita infrastructure capital stock in China is only 20% to 30% of that of developed countries, with enormous investment potential. The construction of major projects has been steadily promoted. The National Development and Reform Commission has approved 91 fixed assets investment projects in the first half of the year, with a total investment of 701.1 billion yuan; Investment in the manufacturing industry continued to grow. The Ministry of Industry and Information Technology guided enterprises to enrich and expand 5G application scenarios, deepen the integrated application of industrial Internet, and grow 6G, quantum communications, satellite Internet and other future industries.

——Boost corporate confidence.

Currently, some enterprises are facing operational difficulties and have weak development expectations.

Analyze profits. In the first half of the year, industrial production steadily recovered, but the profits of large-scale industrial enterprises decreased year-on-year. Can the operating conditions of industrial enterprises improve?

"With the expansion of market demand, enhanced innovation drive, and effective implementation of policies and measures to promote industrial development, the foundation of industrial recovery will continue to be consolidated, and the profitability of enterprises is expected to continue to improve." Fu Linghui believes.

Analyze expectations. In the first seven months, private investment decreased by 0.5%, and the development index of China's small and medium-sized enterprises in July was 89.3, which has rebounded for two consecutive months and is still below the critical value of prosperity of 100. How to promote continuous improvement in social expectations?

It should be noted that some companies have not fully recovered their confidence due to issues such as insufficient demand. Especially for some private enterprises, they are uncertain about their development trends and investment directions. By combining the effectiveness of policies with stimulating the vitality of business entities, a series of actionable and effective policy measures have been intensively introduced to help enterprises operate steadily, far and well.

On July 19th, the Opinions of the Central Committee of the Communist Party of China and the State Council on Promoting the Development and Growth of the Private Economy were released.

"Everyone is actively discussing. We have studied diligently at the first time and once again deeply feel that supporting the development of the private economy is the consistent policy of the Party Central Committee." Lei Jun, Chairman and CEO of Xiaomi Group, said that the company will adhere to its main business, strengthen its industry, promote technological innovation, and drive industrial development.

Let private enterprises dare to venture. 28 measures have been issued by multiple departments to promote the development of the private economy; Multiple tax and fee policies supporting the development of small and micro enterprises and individual businesses will continue to be optimized until the end of 2027... Scientific efforts will be made in these policies, and it is expected to gradually improve. The Purchasing Managers Index for the manufacturing industry in July was 49.3%, an increase of 0.3 percentage points from the previous month.

"In the first half of the year, nearly 400000 yuan of income tax was reduced. We believe that more policy 'red envelopes' will add' fresh water 'to technological innovation," said Zhang Bin, Deputy General Manager of Guangdong Qingyuan Zhongzhen Zhinong Technology Co., Ltd.

Make foreign companies dare to invest. Further optimize policies for the foreign investment environment, continue to reasonably reduce the negative list of foreign investment access, implement the roundtable meeting mechanism for foreign-funded enterprises, maintain regular communication and exchange with foreign-funded enterprises... Aim for a market-oriented, legal, and internationalized first-class business environment, help foreign enterprises deeply cultivate the Chinese market, and share development dividends.

In early July, the United Nations Conference on Trade and Development released the 2023 World Investment Report, which showed that China's foreign direct investment return rate in the past five years was 9.1%, Europe and America was around 3%, and emerging economies such as Brazil, South Africa, and India were 4% to 8%. "We have many partners in Beijing, Shanghai, and Shenzhen, and we look forward to further expanding our business in China in the future," said Luca Ville, co-founder and CEO of French sensor company Punofis.

——Build a solid foundation for people's livelihoods.

Employment is the foundation of people's livelihood. This year, there are 16.62 million new growing laborers who need to be employed in urban areas, reaching a new high in recent years. How can employment needs be better met?

"The increase in supply, intensified competition, coupled with factors such as skill mismatch, information asymmetry, and changes in career choices, have led to significant employment pressure for young people." Professor Li Chang'an from the University of International Business and Economics analyzed that China is focusing on strategic emerging industries, and positions in these fields are more closely matched with the employment skills and job demands of college graduates, which will better attract them for employment. As the economy continues to recover and the demand for employment continues to expand, youth employment is expected to gradually improve.

Implement the "direct compensation and fast processing" model; Implement entrepreneurship guarantee loans and interest subsidy policies; Building tens of thousands of "doorstep" employment service stations... Accurately predicting the employment situation, a series of strong and targeted policies have been successively introduced to reduce burden, stabilize employment, and expand employment.

Give an example. Long term care insurance, a new pilot program, has attracted 169 million insured individuals in just a few years, increasing the number of nursing staff from 30000 to 330000, achieving a "win-win" situation: effectively reducing the burden on families of disabled individuals, promoting the development of service systems, and creating new employment opportunities.

From challenges to challenges, from trends to trends, it is crucial to do a good job in this year's economic and social development work, which is crucial for the comprehensive construction of a socialist modernized country to start a good start and take good steps.