November economic data released: the real economy is stable and rising, reflecting the triple pressure

Text/Enbo Wang

The National Bureau of Statistics announced the operation of the national economy in November on the 15th, which is the last monthly report card before the release of the annual GDP data.

As 2021 draws to a close, in the face of multiple challenges such as a complex and severe international environment and the sporadic occurrence of domestic epidemics, the "triple pressure" mentioned by the Central Economic Work Conference is reflected in this report card.

However, with the solid progress of cross-cycle adjustment of macro policies, the stabilization of supply and price and the increase in bailouts to help enterprises, the main macro indicators are still in a reasonable range.

The recent central economic work conference pointed out that we must see that China's economic development is facing the triple pressure of demand contraction, supply shock, and expected weakening.

Fu Linghui, spokesman for the National Bureau of Statistics and director of the Department of Comprehensive Statistics of the National Economy, said that the above judgment was put forward in the context of the complex and severe international situation, the spread of the global epidemic, the poor circulation of the industrial chain supply chain, the rise in commodity prices, and the prominent domestic structural problems and new downward pressure on the economy. From the statistical point of view, it also clearly reflects this triple pressure and economic downward pressure.

From the perspective of demand, the total retail sales of social consumer goods and the year-on-year growth rate of investment have fallen from double-digit growth at the beginning of the year to single digits, and the average growth rate of the two years has also declined as a whole, reflecting the change in demand contraction. Especially in November, the new crown pneumonia epidemic occurred in many parts of the country, and the growth rate of market sales slowed down. The total retail sales of consumer goods in the month increased by 3.9% year-on-year, and the growth rate fell by 1 percentage point compared with October, of which the catering revenue turned from growth to decline.

From the supply point of view, the international commodity prices have risen, the supply of some domestic energy and metals is tight, the lack of core in some industries such as automobiles has an obvious impact, and the increase in the ex-factory prices of industrial producers has continued to expand. PPI gains widened from 0.3% in January to 13.5% in October, and recent gains have retreated but are still at a high level.

On expectations, the manufacturing PMI has fallen back in a row since April, falling into contraction in September and October, with the small business manufacturing PMI in the contraction range for seven consecutive months. The service industry business activity index has fluctuated greatly due to the impact of the epidemic, but it has also shown a downward trend overall. In November, the index of business activity in the service sector was 51.1%, down 0.5 percentage points from the previous month. Among them, the business activity index of accommodation, catering and other industries has fallen back to the contraction range.

Despite the challenges, judging from the November data, China's economy still withstood the pressure and maintained a recovery trend, especially the real economy showed a steady rise.

With the strong promotion of policy measures such as ensuring supply and stabilizing prices and helping enterprises to bail out, industrial production continued to rebound slightly in November, and the added value of 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, driven by the high-tech and equipment manufacturing industry, the added value of the manufacturing industry above designated size increased by 2.9% year-on-year, accelerating by 0.4 percentage points, and the rebound was higher than that of the mining industry, electricity, heat and gas and water production and supply industry.

Wen Bin, chief researcher of China Minsheng Bank, pointed out that under the support of the state's policy of increasing efforts to ensure the supply and price stability of coal, energy, etc., industrial production has improved this month, in line with the trend indicated by the recovery of the prosperity index, and the production PMI index rose by 3.6 percentage points to 52% this month, returning to the expansion range after two consecutive months.

Ensuring supply and stabilizing prices has been effective, which has also increased the supply of scarce products in the market. In November, 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. From January to November, the output of metal containers and integrated circuits increased by 129.7% and 37.1% respectively year-on-year.

In terms of people's livelihood security, in November, the added value of agricultural and sideline food processing industries and food manufacturing industries above designated size increased by 7% and 9% respectively year-on-year, and the retail sales of grain, oil, food and beverage commodities above designated size increased by 14.8% and 15.5% respectively, all of which were accelerated compared with the previous month, which is conducive to meeting the needs of residents' lives. From January to November, investment in education and health increased by 9.5% and 26.6% respectively year-on-year, and these investments closely related to people's livelihood continued to increase, significantly faster than all investment.

After the "handover" in November, it also means that the annual performance of China's economy is about to be revealed.

Talking about the economic trend of the whole year, Wen Bin believes that from the macroeconomic data in November, domestic production has improved, but the demand is still weak, and the stable growth policy is expected to accelerate its efforts. The central bank's RRR cut of 0.5 percentage points was implemented on the 15th, after the introduction of carbon emission reduction support tools, reducing the interest rate of supporting agriculture and small reloans, and increasing support for stable growth, it is expected that this year's economic growth target can be achieved, but the new downward pressure on the economy cannot be ignored.

Fu Linghui said that the main goals and tasks of economic and social development throughout the year are expected to be better achieved. Judging from the development of 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 prevention and control of the epidemic 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 policy trend next year, the Central Economic Work Conference made it clear that cross-cycle and counter-cyclical macro-control policies should be organically combined.

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 dimensions, 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 to return to trend levels.

From: The country is a through train

Editor: Chen Haoxing

Editor-in-charge: Zhou Rui