"Monthly Examination" Refracts Triple Pressure Can China's Economy Achieve its Annual Target?

(Economic Observation) "Monthly Examination" Refracts Triple Pressure Can China's Economy Achieve its Annual Target?

Beijing, 15 Dec (China News Service) -- On 15 December, China's official announcement on the operation of the national economy in November was announced. The triple pressure of demand contraction, supply shock and expected weakening mentioned by the Central Economic Work Conference is reflected in this "monthly examination" report card. In the face of challenges, can China achieve the main goals of economic and social development for the whole year?

Fu Linghui, spokesman for China's National Bureau of Statistics and director of the Department of Comprehensive Statistics of the National Economy, said bluntly on the same day that the statistics clearly reflect the above-mentioned triple pressure and economic downward pressure.

From the perspective of demand, the year-on-year growth rate of China's total retail sales of consumer goods fell from double-digit growth at the beginning of the year to single digits, and the average growth rate of the two years also fell from 6.3% in March to 1.5% in August. Investment growth also showed a similar downward trend, reflecting the change in demand contraction.

From the supply point of view, the international commodity prices rose, China's energy and metal supply is tight, the lack of core problems in some industries such as automobiles has a significant impact, the year-on-year increase in PPI increased from 0.3% in January to 13.5% in October, and although the increase in November has declined, it is still at a high level.

From the expectation point of view, China's manufacturing PMI has fallen continuously since April, falling to the contraction range in September and October, of which the small business manufacturing PMI has been in the contraction range for 7 consecutive months. The business activity index of the service industry has fluctuated greatly due to the impact of the epidemic and has also shown a downward trend overall.

However, in the face of the above challenges, China's economy still withstood the pressure to maintain a recovery trend, and the real economy was more stable and rising. This is also reflected in the latest November data.

Excluding some short-term disturbances and lengthening the "time line", the main indicators of China's economy are in a reasonable range. From January to November, the added value of industries above designated size increased by 10.1% year-on-year, the service industry production index increased by 14%, the total retail sales of social consumer goods increased by 13.7%, and the total import and export of goods increased by 22%, all maintaining rapid growth.

The continuous strengthening of the industrial manufacturing industry will support the consolidation and expansion of the real economy. In the same month of November, with the strong promotion of policy measures such as ensuring supply and stabilizing prices and helping enterprises to bail out, the added value of China's industries above designated size increased by 3.8% year-on-year, 0.3 percentage points faster than the previous month, accelerating for two consecutive months. Among them, the manufacturing industry, driven by high-tech and equipment manufacturing, has rebounded more than the mining industry, electricity, heat and gas and water production and supply industry.

Ensuring supply and stabilizing prices has been effective, which has also increased the supply of scarce products in the market. In November, China's raw coal production increased by 4.6% year-on-year, 0.6 percentage points faster than the previous month; the ex-factory price of coal mining and washing industry fell by 4.9% month-on-month. The lack of cores in the automotive industry has eased, with vehicle production falling 7.1% year-on-year in November, a decline of 1.2 percentage points narrower than the previous month.

After handing over the November report card in a steady manner, it also means that the performance of China's economy for the whole year is about to be revealed.

Wen Bin, chief researcher of China Minsheng Bank, believes that from the current data, China's domestic production has improved, but demand is still weak, and the stable growth policy is expected to accelerate its efforts. The implementation of the 0.5 percentage point reduction of the Central Bank of China, coupled with the previous launch of carbon emission reduction support tools, reduced the interest rate of supporting agriculture and small reloans, and increased support for stable growth, it is expected that this year's economic growth target can be achieved, but we cannot ignore the new downward pressure on the economy.

While stressing that the main goals and tasks of economic and social development throughout the year are expected to be better achieved, Fu Linghui also pointed out that from the perspective of development next year, there is still good support for overcoming difficulties and challenges and maintaining stable economic operation.

He mentioned that China's domestic demand is expected to increase. The steady growth of residents' income and the overall stability of the employment situation are conducive to improving residents' consumption capacity and willingness to consume, as long as the epidemic prevention and control is well controlled, the development of consumption next year is still promising. The major projects of the "14th Five-Year Plan" have been started one after another, and the construction of "two new and one heavy" infrastructure has been steadily promoted, which is conducive to enhancing the driving role of effective investment.

For the future policy trend, Ding Shuang, chief economist of Standard Chartered Bank Greater China and North Asia, believes that the Chinese government will enhance the autonomy of macro policies, requiring policies to focus on assessing the overall situation in the medium and long term, and improving forward-looking and preventive. It is expected that in 2022, the government will introduce supporting macro and structural policies to promote economic growth back to trend levels. (End)

Source: China News Network