The overall trend of economic operation continuing to recover (economic focus) is stable. May | Economy
Core Reading
In May, China's economic operation continued to recover, with varying degrees of improvement in the month on month growth rate of major production demand indicators. Production supply continued to increase, consumer investment gradually recovered, foreign trade resilience continued to emerge, and employment and consumer prices remained generally stable. Looking ahead to the annual economic development, the economy still has many favorable conditions to support its operation, and high-quality development will steadily advance.
On June 15th, the National Bureau of Statistics released the performance of the national economy for May 2023. Data shows that in May, the policy of stabilizing growth, employment, and prices continued to be effective, production demand steadily recovered, employment prices remained generally stable, and transformation and upgrading continued to advance. The growth rate of major production demand indicators improved to varying degrees compared to the previous month, and the economic operation continued to recover.
At the press conference of the State Council Information Office held on the 15th, Fu Linghui, spokesperson for the National Bureau of Statistics and Director of the Department of Comprehensive Statistics of the National Economy, introduced the relevant situation.
Production and supply continue to increase, while consumer investment gradually recovers
At the meeting, Fu Linghui analyzed the main characteristics of the economic operation in May from five aspects.
——The production supply continues to increase.
With the comprehensive restoration of normal economic and social operations, the demand for services continues to be released, driving the growth of the service industry. In May, the service industry production index increased by 11.7% year-on-year, maintaining a rapid growth. Combined with the impact of the May holiday and the lower base of the previous year, the contact service industry has grown rapidly. In May, the production index of the accommodation and catering industry increased by 39.5% year-on-year.
Industrial production is steadily recovering. In May, the added value of industrial enterprises above designated size increased by 3.5% year-on-year. After deducting the impact of the increase in base in the same period last year, the average growth rate in the two years has accelerated compared to the previous month.
——Consumer investment is gradually recovering.
The market sales have steadily increased. With the expansion of consumer scenarios and the increase of residents going out for shopping, market sales continue to expand, and service-oriented consumption is growing rapidly. In May, the total retail sales of consumer goods increased by 12.7% year-on-year, with catering revenue increasing by 35.1%.
The investment scale continues to expand. From January to May, fixed assets investment increased by 4% year on year, of which infrastructure investment and manufacturing investment increased by 7.5% and 6% respectively, maintaining rapid growth.
——The resilience of foreign trade continues to emerge.
In the face of the difficulty of shrinking external demand, China has actively developed trade with countries and regions along the "the Belt and Road", stabilized the foreign trade market of traditional trading partners, and promoted foreign trade to promote stability and quality improvement. In May, the total import and export volume increased by 0.5% year-on-year, in sharp contrast to the decline in foreign trade of some emerging economies. From January to May, China's total foreign trade imports and exports to countries along the "the Belt and Road" grew 13.2% year on year, continuing to grow rapidly.
——Employment and consumer prices are generally stable.
With the recovery of the economy, an increase in job recruitment demand, and an increase in labor participation rate, the overall employment situation is stable. In May, the national urban survey unemployment rate was 5.2%, unchanged from the previous month.
The supply and demand relationship is basically stable, and consumer prices are generally stable. In May, consumer prices for residents increased by 0.2% year-on-year, an increase of 0.1 percentage points from the previous month. Excluding food and energy, the core CPI increased by 0.6% and remained relatively stable.
——High quality development is steadily advancing.
New momentum continues to grow. The leading role of innovation continues to strengthen, and new industries and formats are developing rapidly. From January to May, the added value of equipment manufacturing industry above designated size increased by 6.8% year-on-year, faster than the growth of industrial enterprises above designated size. The online retail sales of physical goods increased by 11.8%, maintaining a rapid growth.
The pace of consumption upgrading is steady. From January to May, the retail sales of upgraded goods such as gold, silver, jewelry, and sports and entertainment products in units above the quota increased by 19.5% and 11% respectively. Investment in high-tech industries increased by 12.8% year-on-year, significantly faster than the growth rate of all investments.
At the same time, it should be noted that in May, the year-on-year growth rate of some major indicators of production demand has declined. Fu Linghui's analysis: "Last April, the domestic economy was greatly affected by the impact of the epidemic. After May, the economy showed a significant rebound trend, with corresponding base numbers significantly increasing. Some indicators fell, mainly due to the impact of the same period last year's base increase. Excluding the base factor, the overall economic operation was stable."
Industrial production is basically stable, and the future development trend is improving
"In May, industrial production overcame the adverse factors of weak market demand and price decline, and overall continued to recover. Excluding the base factor, industrial production remained basically stable." Fu Linghui gave a specific introduction to the relevant situation——
The marginal acceleration of industrial production. From the average two-year growth rate, the added value of large-scale industries in May increased by an average of 2.1% over the past two years, an increase of 0.8 percentage points compared to the previous month. From the month on month growth rate, the industrial sector above designated size increased by 0.63% in May.
The equipment manufacturing industry has obvious support. In May, the added value of the equipment manufacturing industry increased by 8% year-on-year, significantly faster than the growth rate of all large-scale industries, contributing more than 70% to the growth of large-scale industries. Among them, the added value of the automobile manufacturing industry, electrical machinery and equipment manufacturing industry increased by 23.8% and 15.4%, respectively.
Large and medium-sized enterprises are growing rapidly. In May, the added value of large and medium-sized enterprises above designated size increased by 3.6% and 6% respectively, faster than the growth rate of all industrial enterprises above designated size, playing an important supporting role in industrial stability.
The trend of industrial high-end, intelligent, and green development is obvious. From January to May, the added value of the aerospace and equipment manufacturing industry increased by 25.9% year-on-year, the added value of the intelligent vehicle equipment manufacturing industry increased by 33%, and the production of new energy vehicles and solar cells increased by 37% and 53.6% respectively. In May, the export value of "New Three Samples" products represented by lithium batteries, solar cells, and electric passenger vehicles increased by more than 50% year-on-year.
Fu Linghui's analysis suggests that industrial production will still face certain pressures in the next stage. "At the same time, it should be noted that after long-term development, China's industrial system is complete, supporting facilities are relatively complete, and its ability to adapt to changes in market demand is steadily improving. Overall, the future trend is developing well."
In May, the ex factory price index of industrial producers decreased by 4.6% year-on-year, an increase of 1 percentage point compared to the previous month. Fu Linghui stated that the expansion of PPI decline in May was influenced by multiple factors. "Firstly, since the beginning of this year, global economic growth has been sluggish, and prices of international energy and other commodities have generally declined, gradually affecting China's imports. Secondly, domestic market demand in some industries is still insufficient. Thirdly, due to factors such as economic fluctuations and cyclical changes in major economies around the world, international demand for some export products has decreased, affecting prices in related industries. In addition, a high base in the same period last year is also an important factor." In response to this issue, efforts should be made in the next stage to restore and expand demand, accelerate the construction of a modern industrial system, promote a higher level of dynamic balance between production and demand, drive industrial product prices back to a reasonable level, and promote stable and healthy industrial development.
There are still many favorable conditions supporting the economic development throughout the year
Due to the lower base in the same period last year, the economic growth in the second quarter of this year was significantly faster than that in the first quarter. In the third and fourth quarters, as the base increases, the economic operation will return to the normal growth level. Looking ahead to the full year's economic development, Fu Linghui believes that we still have many favorable conditions to support.
The driving effect of consumption is gradually increasing. In the first quarter, the contribution rate of final consumer expenditure growth to economic growth has reached 66.6%. From January to May, the year-on-year growth rate of total retail sales of consumer goods in society accelerated by 3.5 percentage points compared to the first quarter. The growth trend of service-oriented consumption is good. From January to May, the national film box office revenue increased by over 40% year-on-year, and the catering revenue increased by 22.6%. In addition, the overall improvement of the employment situation is conducive to increasing residents' income and improving their consumption ability. Various departments actively introducing policies to promote consumption will also enhance residents' willingness to consume. "The enhanced driving effect of consumption will effectively promote economic recovery and improvement," said Fu Linghui.
The accumulation of innovation momentum has been enhanced. Since the beginning of this year, China has deeply implemented the innovation driven development strategy, actively promoted technological self-reliance and self-improvement, and the development trend of high-end, intelligent, and green manufacturing industry is obvious. From January to May, the production index of the information transmission, software, and information technology services industry increased by 11.3%, all maintaining rapid growth; The production of industrial control computers and systems, as well as polycrystalline silicon, increased by 33.4% and 84.2% year-on-year, respectively. Fu Linghui believes that the enhancement of innovative development momentum will effectively promote industrial upgrading and development, promote the transformation of economic growth momentum, and lay a solid foundation for the stable and healthy development of China's economy.
The dividends of reform and opening up continue to emerge. Since this year, China has deepened reform in key areas and key links, steadily expanded institutional openness, vigorously stabilized trade with traditional trading partners, and actively expanded economic and trade cooperation with countries and regions along the Regional Comprehensive Economic Partnership Agreement and the the Belt and Road, with steady results. From the utilization of foreign investment, the actual utilization of foreign investment in China's high-tech industries increased by 12.8% year-on-year from January to April. Fu Linghui stated that the next step is to comprehensively deepen reform and steadily expand high-level opening up, which will inject strong impetus into economic development.
There are many benefits, but challenges still exist. At present, the international environment is complex and severe, and the recovery of the world economy is still weak. The policy contraction and spillover effects of major developed economies are evident, and there are many unstable and uncertain factors. The foundation for the recovery of the domestic economy is not solid.
"It should be noted that since the comprehensive restoration of normal economic and social operation, macroeconomic policies have been working together, and the economic operation has been steadily improving with high-quality development. Fu Linghui said that there are difficulties and risks on the way forward, but China has a strong material and technological foundation, broad market space, and enhanced innovation capabilities." We have the conditions, ability, and confidence to overcome difficulties and promote economic recovery. "
