What is the future trend of China's economy in the first half of the year, with multiple data indicators showing signs of improvement? A set of data to understand the beginning | domestic demand | economy

In the first half of this year, China's economy showed a rebound and positive trend, achieving a good start in the first quarter and continuing to recover in the second quarter. But at the same time, it also faces difficulties such as weak endogenous driving force, insufficient demand, and new obstacles to economic transformation and upgrading. Multiple departments have recently released a series of economic data. What can experts, scholars, and chief economists of institutions see through the numbers? How do they judge the future trend of the Chinese economy?

01

Multiple data indicators are improving

China's economy continues to rebound

Zhang Liqun, a researcher at the Development Research Center of the State Council, just went to Jiangsu for research. His feeling is that companies are under pressure, but more dynamic.

Zhang Liqun, a researcher at the Development Research Center of the State Council: After visiting many enterprises, I feel that from the perspective of enterprises, everyone still has confidence in overcoming difficulties, clear direction, enthusiasm, and is still working hard. We are very encouraged by this situation.

Zhang Liqun stated that although facing pressure such as demand contraction, supply shock, and weakened expectations, the previously released China Purchasing Managers Index (PMI) shows that China's economy showed a rebound and positive trend in the first half of the year.

The data also shows that in June, China's manufacturing momentum index reached its highest level in the second quarter, indicating that the economic rebound momentum is continuing.

In addition, a series of authoritative data recently released have revealed more warmth.

The People's Bank of China announced that credit disbursement significantly rebounded in June, and financial support for the real economy continued to increase.

The General Administration of Customs announced that China's foreign trade imports and exports increased by 2.1% year-on-year in the first half of the year, reaching a new historical high in scale.

The Ministry of Industry and Information Technology announced that the completion volume of China's shipbuilding industry increased by 14.2% year-on-year in the first half of the year, and the international market share of new orders exceeded 70%.

In addition, the number of newly started major water conservancy projects in China in the first half of the year was the highest in history, and the transportation production scale of China's civil aviation industry has basically recovered to the level of the same period in 2019. In June, the development index of small and medium-sized enterprises in China stopped falling and rebounded. Among the 8 major industries surveyed, the sales volume index of 7 industries and the domestic order index of 6 industries increased.

Zhou Jingtong, Vice President of the China Bank Research Institute, who has just led the team to release the third quarter economic and financial outlook report, believes that the next step will be to further strengthen fiscal and financial policies, and increase support for stable growth.

Zhou Jingtong, Vice President of the Research Institute of Bank of China: The economic performance in June should be better than that in April and May. In the second half of the year, China's economy should generally continue the process of sustained recovery. Looking at the whole year, we expect a growth rate of around 5.4%, which should be able to meet the government's target of 5% set at the beginning of the year.

The reporter also sorted out research reports from more than ten financial institutions, including Agricultural Bank of China, CITIC Securities, and Ping An Securities. All institutions generally believe that China's fiscal and monetary policies will be coordinated in the second half of the year, and stable foreign trade policies will continue to take effect, promoting further economic recovery. The fluctuation of short-term economic data does not change the overall direction of China's economy towards stability and improvement.

02

Domestic demand rebounds

Provide strong support for economic growth

Since the beginning of this year, with the comprehensive restoration of normal operation of China's economy and society, domestic demand has steadily rebounded, and the strong domestic market has provided strong support for the sustained economic recovery.

The Chief Economist of CITIC Securities has discovered a new change while sorting out the industrial and service industry data for the first half of the year.

The Chief Economist of CITIC Securities clearly states that the red line represents industry, and the black line represents the service industry. Historically, industry has generally been higher, but as can be seen from the graph, the black line has been rapidly rising since the beginning of this year. So this year, the main driving factor for economic recovery is actually the recovery of the service industry. This is also a significant difference in economic structure compared to the past this year. This economic structure should be said to be more optimized, and the improvement of people's livelihoods will also be more significant. It may have a transmission that if the sales of your services and goods can also recover, then industrial output will gradually recover.

It is clearly believed that many policies promoting consumption and expanding domestic demand this year have provided strong support for the economic recovery in the first half of the year.

While promoting consumption, expanding effective investment is also driving domestic demand. In the first five months of this year, the national fixed assets investment exceeded 18 trillion yuan, and a number of major projects that are both conducive to the current and can promote long-term development accelerated.

Zhang Liqun: We need to further leverage the driving effect of government investment on overall social investment. Through significant strengthening of government investment, we can significantly restore production in enterprises, improve employment, and significantly improve household income. On this basis, I believe that by overcoming the package of policies aimed at shrinking demand, we can see significant results and consolidate the overall economic recovery.

03

Multiple measures to continue supporting stable growth

At present, China is in a critical period of economic recovery and industrial upgrading, and it is even more necessary to put efforts into transforming the mode, adjusting the structure, and increasing driving force. Recently, multiple policy measures to stabilize growth, employment, and consumption are being implemented one after another.

The Ministry of Industry and Information Technology has made it clear that it will cultivate more high-quality small and medium-sized enterprises, guide innovation resources to gather in small and medium-sized enterprises, promote collaborative innovation development among large, small and medium-sized enterprises, and effectively enhance the core competitiveness of small and medium-sized enterprises.

Zhou Jingtong: We have observed that the financing costs of small and medium-sized enterprises reached a historic low in the first half of this year. In the next step for small and medium-sized enterprises, I think there is still a lot to do in terms of tax reduction and fee reduction, including project development and land supply.

In response to the generally high interest rates on existing housing loans, the People's Bank of China encourages commercial banks to negotiate with borrowers to change contracts or replace existing housing loans with newly issued loans.

The National Development and Reform Commission has made it clear that it is necessary to quickly formulate and introduce policies to restore and expand consumption, accelerate the construction of charging stations, energy storage facilities, and the renovation of supporting power grids, and vigorously promote the introduction of new energy vehicles to rural areas.

The Ministry of Commerce has proposed to introduce targeted supporting measures to promote high-quality development in the automotive, home furnishings, brand consumption, and catering industries.

Several provinces and cities have recently introduced a series of measures to promote employment and benefit people's livelihoods.

Hebei Province plans to develop and establish 5500 temporary public welfare positions this year, and provide job seeking subsidies of 2000 yuan per person to eligible graduates in need. Shandong Province has allocated 6.8 billion yuan this year to fully support the stable employment foundation. The central and provincial employment subsidy funds arranged by Jiangsu Province are expected to increase by 31% this year.

Zhang Liqun: We need to adopt various policies to increase employment and household income, so as to significantly improve the employment situation and accelerate the growth of household income. Only in this way can we promote a sustained recovery in consumption.