China Measurement & Control
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China's economic development: confident in stable expectations
"Stability expectations" is one of the "six stability" proposed by the Political Bureau of the CPC Central Committee in recent days. In the context of changes in economic stability, understanding stability expectations involves three questions: What is the current economic outlook? How is the operating trend? What to do next? Multi-party analysis points out that the fundamentals of the stable operation of the economy have not changed, and the trend of stability and improvement has not changed. Further in-depth structural reforms on the supply side, fighting the "three major challenges", and deepening reform and opening up, the Chinese economy will steadily move towards high quality Development stage.
How to see
Stable and solid fundamentals strengthened in the first half of the year
"In the first half of the year, China's economy continued to develop in a generally stable, stable, and positive direction." Mao Shengyong, a spokesman for the National Bureau of Statistics, said.
Where is "stable"?
Let's look at the growth rate. In the first half of the year, the GDP growth rate was 6.8%. For the twelve consecutive quarters, it has been operating steadily at the mid-high speed range of 6.7% to 6.9%. China is still one of the best developing countries in the world. The surveyed unemployment rate in cities and towns has been below 5% for three consecutive months. Employment has not only stabilized, but has continued to improve. In terms of prices, the consumer price CPI rose by 2% in the first half of the year, showing a modest rise. Food is the foundation. The total output is 138.72 million tons, which is a good harvest. Attracting foreign investment, China ’s charm remains unchanged. In the first half of the year, 29,591 foreign-funded enterprises were newly established, a year-on-year increase of 96.6%.
Where is "good"?
Structural optimization and upgrading. According to reports, in the first half of the year, the added value of the tertiary industry accounted for 54.3% of GDP, an increase of 0.3 percentage points over the same period last year; the contribution of the service industry to economic growth was 60.5%, an increase of 1.4 percentage points over the same period last year. Kinetic energy speeds up conversion. In the first half of the year, the average daily number of newly registered market participants was 18,100, representing rapid growth in related industries and products with high technological progress, transformation and upgrading, and relatively high technological content, and accelerated growth in service consumption. In addition, there are improvements in quality and efficiency.
Generally speaking, in the first half of the year, the fundamentals of China's stable economy have been consolidated, and the short-term downward pressure has not caused significant distress to the Chinese economy. More importantly, in the pattern of economic growth, domestic demand has become the determining force. Although the external environment has changed, China has a solid foundation for steady economic growth.
how about it
Be confident that you will achieve your goals for the year
Analyzing the economic situation, the existing "shape" is of course important, and the key is to grasp the "potential" in operation.
How does the macro economy go?
"China's economic potential is large and resilient. Although the economy is facing the risk of fluctuations, it is generally stable and there is no problem in achieving the set target of 6.5% for the whole year." Niu Li, director of the Macroeconomic Research Office of the Economic Forecasting Department of the National Information Center, stressed.
Looking at consumption, the contribution rate of final consumption expenditure to economic growth from 2011 to 2017 averaged 56.8% per year, and the fundamental role of consumption in economic growth continued to increase. Especially since the beginning of this year, consumer spending in the information and leisure sectors has grown rapidly, and consumption is upgrading. As a country with a huge market of nearly 1.4 billion people and a country with more than 400 million middle-income people, China has great development potential and great room for manoeuvre.
Looking at investment, although the growth rate has slowed down, the structure is constantly optimizing. In particular, investment in the transformation and upgrading of the manufacturing industry has maintained double-digit growth, emerging industries have risen rapidly, and the growth of new kinetic energy has injected endless momentum into China's economic development.
Economic and trade frictions have put pressure on the Chinese economy to some extent, but overall they are limited and controllable. In recent years, China's economic structure has been continuously optimized. At present, domestic demand has contributed more than 90% in economic growth, and foreign trade dependence has been about 33%, which is lower than the world average. Moreover, China implements all-round opening-up. Foreign trade does not fully rely on a country or region. The mature multilateral trading system and the advancement of the “Belt and Road” provide sufficient alternatives.
How to do it
Rational judgment, precise policy, firm confidence
Stable expectations, after all, rely on firm confidence. Confidence comes from a rational judgment of economic trends, as well as accurate policy in a timely manner.
The recent meeting of the Political Bureau of the Central Committee of the People's Republic of China proposed that we should continue to implement a proactive fiscal policy and a prudent monetary policy to improve the forward-looking, flexible, and effective policies.
"The proactive fiscal policy will play a greater role in expanding domestic demand and structural adjustment." Liu Shangxi, president of the Chinese Academy of Financial Sciences, said. He said that a proactive fiscal policy will inject certainty into the economic and social operation. Through the implementation of measures such as reducing taxes and fees, encouraging R & D and innovation, supporting inclusive finance, and supporting small and medium-sized enterprises, it will stabilize the national economy and guide the formation of good social expectations.
"Prudent monetary policy will provide more tangible support for the real economy." Xu Hongcai, deputy chief economist of the China International Economic Exchange Center, said that the current policy direction is clear. In terms of credit, it pays more attention to differentiation and pressure. We will better combine the prevention and mitigation of financial risks with the service of the real economy, and give preference to small and micro enterprises and “agricultural, rural, and rural” enterprises, and actively improve market expectations.
Enterprises are the main players in the market, and their confidence is extremely precious.
Miao Rong, chief researcher of the China Entrepreneurs Association, introduced that the Enterprise Association recently organized a number of companies to exchange information on the current external situation changes. "Some companies feel the impact, but everyone is still full of confidence in the future."
The more the external environment changes, the more you must focus on doing your own thing.
Many experts said that the current Chinese economy does face some new challenges and new uncertainties, but as long as China continues to deepen reforms, expand opening up, promote supply-side structural reforms, and continue to expand domestic demand, it is foreseeable that the Chinese economy will continue to Run within a reasonable interval.
(Responsible editor: Duan Siqi)
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