The first quarter report of China's economy, which has attracted much attention from the market, was announced on the 16th. With the gradual implementation of measures to stabilize growth, China's economy has made a good start.
According to the first-quarter macroeconomic data released by the National Bureau of Statistics, GDP grew by 5.3% year-on-year in the first quarter, an increase of 0.1 percentage points from the fourth quarter of 2023. The national investment in fixed assets increased by 4.5% year-on-year, and the growth rate was 0.3 percentage points faster than that in January ~ February. In March, the year-on-year growth rate of total retail sales of consumer goods and industrial added value declined.
Sheng Laiyun, deputy director of the National Bureau of Statistics, said at a press conference of the State Council Information Office on the 16th that on the whole, the national economy had a good start in the first quarter, and the positive factors had accumulated and increased, laying a good foundation for achieving the goals and tasks of the year. However, it should also be noted that the complexity, severity and uncertainty of the external environment have risen, and the foundation for economic stability and improvement is not yet solid.
Consumption contributed 73.7% of GDP growth in the first quarter. Sheng Laiyun said in response to a question from the first financial reporter at the press conference that from the perspective of the future situation, the favorable conditions to support consumption are still increasing. Affected by the impact of the epidemic in recent years, the income level needs to continue to improve, and the consumer confidence index is still below the critical value. It is necessary to strengthen the foundation for the economic rebound and enhance the residents' ability and confidence in consumption.
According to the analysis of the first financial news by a number of experts, the GDP growth rate in the first quarter exceeded the general expectations of the market, mainly due to the pre-emptive force of the stable growth policy and the improvement of external demand, but the fluctuation of macroeconomic data in March increased significantly. GDP in the second quarter is expected to further accelerate year-on-year, while promoting scientific and technological innovation and accelerating the development of new quality productivity, how to guide the real estate industry to stabilize and recover as soon as possible, as well as promote a moderate recovery in prices, will be the focus of macroeconomic control in the coming period.
Why the economy is growing faster than expected
At the press conference, Shenglai used four key words to evaluate the economic operation in the first quarter: continuous recovery, stable start, steady progress, and good start.
Sheng Laiyun said that in the first quarter, with the joint efforts of all regions and departments, we will increase the implementation of macro policies, make efforts to implement the policies, and promote the continuous recovery of the national economy in the first quarter and a good start. From the perspective of the main indicators of economic operation, the stability and coordination of economic operation have been enhanced, the market vitality has been enhanced, and the confidence of market operators has continued to improve.
GDP grew by 5.3% in the first quarter, better than market expectations. Sheng Laiyun said: "Many people think this data is higher than expected, but I want to make it clear that GDP growth of 5.3% is realistic. From the perspective of our accounting, the GDP growth of 5.3% in the first quarter was mainly driven by the recovery of industry and the improvement of the service industry. ”
Why is there a temperature difference between macro data and micro feelings? Sheng Laiyun pointed out that the economic recovery is uneven, and accounting is a summary of the added value of all industries and an indicator that reflects the overall situation. From the perspective of the degree of recovery, we find that the recovery of consumption is not as good as production, and the recovery of micro, small and medium-sized enterprises is not as good as that of large enterprises, so there is an obvious imbalance in the economic recovery, and everyone may have a certain understanding of how this data feels.
Sheng Laiyun stressed that while continuing to strengthen the foundation for economic recovery, it is necessary to pay further attention to the imbalance of economic development, especially the development of small, medium and micro enterprises.
Zhang Liqun, a researcher at the Macroeconomic Research Department of the Development Research Center of the State Council, said that GDP increased by 5.3% year-on-year in the first quarter, not only maintaining a growth rate of more than 5%, but also improving the growth rate of the whole year last year, which means that the national economy has a good start. In this good start, the growth rate of fixed asset investment and industrial added value have accelerated compared with last year, which has further highlighted the supporting role of economic growth and released positive signals. At the same time, from a structural point of view, the growth of high-tech manufacturing has accelerated, and the trend of innovation-led high-quality economic development has become more distinct.
Zhang Liqun believes that it is worth noting that this year's consumption and service industry may not appear after the transition of epidemic prevention and control last year, in this case, looking forward to the future, to support the economy to further stabilize and rebound, to complete the annual expected target, to maintain the strong growth of investment and industrial production is very important, especially to play a key role in investment, especially to play the pull and amplification effect of government investment, the use of fiscal policy, Monetary policy has carried out countercyclical adjustments to further accelerate the growth rate of infrastructure investment, thereby stimulating enterprise production and investment, and driving the sustained recovery of employment and household consumption.
Industrial production stabilized and rebounded
Industry was a bright spot in the recovery and development in the first quarter. In the first quarter, the added value of industrial enterprises above designated size increased by 6.1 percent year-on-year, 0.8 percentage points faster than that in the fourth quarter of last year.
Sheng Laiyun explained: First, under the impetus of policies, the confidence in the development of enterprises is increasing; second, there are positive changes in the recovery of domestic and foreign demand; and third, the industrial recovery is related to the promotion of some recent policies, such as large-scale equipment renewal and the trade-in of consumer goods. In addition, there is a certain base effect.
Guan Bing, director of the Institute of Industrial Economics of China Electronic Information Industry Development Research Institute, analyzed that from the supply side, enterprises are expected to gradually improve, promoting industrial production to stabilize and rebound. In March, the manufacturing PMI, production expectations, and other prosperity indices performed well; from January to February, the profits of industrial enterprises above designated size turned positive, which effectively enhanced the confidence of enterprises in production. From the demand side, the driving role of industrial investment and exports has been strengthened, supporting the rapid growth of the industrial economy and providing a strong impetus for the steady improvement of the industrial economy.
In March, the added value of industrial enterprises above designated size increased by 4.5% year-on-year, and the growth rate decreased by 2.5 percentage points compared with January ~ February. Wang Qing, chief macro analyst of Oriental Jincheng, said that on the one hand, this is related to the increase in the base in the same period last year and the year-on-year decrease in working days in March this year; on the other hand, the month-on-month performance of industrial added value in March was significantly weaker than that of seasonality, showing that the marginal momentum of industrial production in the month weakened under the drag of the downturn in real estate and terminal consumption.
Sheng Laiyun believes that from the perspective of the future trend, due to several reasons to support the industrial rebound will continue to play a role in the coming period, so it is judged that the trend of the industrial economy will continue to be maintained. Of course, the foundation for the rebound needs to be further consolidated, and it is necessary to increase support for the real economy.
The contribution rate of domestic demand reached 85.5%
In the first quarter of GDP growth, domestic demand contributed 85.5% to economic growth, of which consumption contributed 73.7%. In the first quarter, the total retail sales of consumer goods 120327 billion yuan, a year-on-year increase of 4.7%, and the retail sales of services increased by 10.0% year-on-year. In March, the total retail sales of consumer goods increased by 3.1% year-on-year and 0.26% month-on-month.
Affected by the high base, the year-on-year growth rate of total retail sales of consumer goods in March 2024 fell back and was less than expected, with weak consumer spending on goods and faster growth in service consumption.
Wang Qing analysis, March consumption showed an obvious "strong necessity, optional weak" characteristics, the month's retail sales of food, daily necessities, Chinese and Western medicines and other necessities year-on-year growth rate compared with 1~2 months have accelerated, but cosmetics, gold, silver jewelry, communication equipment and other optional consumer goods retail sales growth has slowed down compared with 1~2 months. This is partly attributable to the general increase in the retail base of consumer discretionary in the same period last year, and on the other hand, it is also in line with the structural characteristics of household consumption when consumer confidence is weak. In addition to consumer confidence needs to be boosted, the direct drag effect of the downturn in the real estate market on consumption still exists.
In terms of investment, China's fixed asset investment growth continued to accelerate in the first quarter of 2024, driven by the rebound in manufacturing and infrastructure investment, and the performance exceeded expectations.
In the first quarter, the national investment in fixed assets (excluding rural households) 100042 billion yuan, up 4.5 percent year-on-year, 1.5 percentage points faster than that of the previous year, and after deducting investment in real estate development, the national investment in fixed assets increased by 9.3 percent. By sector, infrastructure investment increased by 6.5 percent, manufacturing investment increased by 9.9 percent, and real estate development investment fell by 9.5 percent.
Liu Xiangdong, chief analyst of Dongyuan Investment, told the first financial reporter that the main reasons for the outstanding performance of manufacturing investment are: first, the profits of industrial enterprises have rebounded rapidly, and they have continued to maintain positive growth in the past six months, which has strongly promoted the rapid growth of the manufacturing industry. Second, the recovery of the overseas economy has promoted the increase in external demand, the domestic increase in fiscal deficit has formed a strong support for domestic demand, and the recovery of domestic and foreign demand has led to the improvement of the prosperity of the manufacturing industry. At the same time, the domestic substitution of manufacturing industries in the fields of computers and communications has also strongly promoted the rapid growth of current manufacturing investment.
The data shows that real estate investment in January ~ March fell by 9.5% year-on-year, and the decline was 0.5 percentage points larger than that in January ~ February. The property market was significantly colder in the first quarter, with year-on-year growth rates of -19.4% and -30.7% in sales area and sales, respectively, compared with -8.5% and -6.5% respectively in the whole of last year.
Sheng Laiyun said that from the perspective of real estate investment and sales in the first quarter, the real estate market is still in the process of adjustment. The effect of policies and measures to support the stable development of real estate continues to appear. Since the beginning of this year, various localities have stepped up their efforts to support the stable development of real estate, including relaxing purchase restrictions and reducing provident fund loan interest rates. Since the beginning of this year, more than 30 cities have put forward the housing "old for new" policy, with the joint efforts of local governments, the sales area and sales of new commercial housing in the first quarter have narrowed by 1.1 and 1.7 percentage points respectively compared with 1~2 months.
He stressed that China's real estate market is supported, because our urbanization has not been completed, the urbanization rate of permanent residents in 2023 is 66.2%, but the urbanization rate according to the registered population is less than 50%, and there are still 297 million migrant workers in the city who are not fully civilized, and the proportion of these migrant workers who enter the city to buy houses is not high. With the improvement of people's living standards and the deepening of urbanization, China's real estate market is still relatively large in terms of demand for improvement and rigid demand, and China's real estate market still has the supporting conditions for sustainable and healthy development.
Luo Huanjie, a researcher at Guangkai Chief Industry Research Institute, analyzed that looking forward to the second quarter, infrastructure investment will play a strong role in supporting the economy under the effect of counter-cyclical policies, strong support of financial resources and abundant major projects. Driven by a series of factors, manufacturing investment can still maintain rapid growth, with the growth rate exceeding the pre-epidemic level, and the role of stabilizing growth has been strengthened. Real estate, driven by favorable policies, has gradually bottomed out and stabilized, the decline has narrowed, and the drag on investment has been reduced.
Zhao Wei, chief economist of Guojin Securities, also believes that the fiscal and financial policy strength or marginal improvement in the second quarter, the early policy effect is expected to usher in a concentrated appearance in the peak season, the "ultra-long-term special treasury bonds" and "three major projects" to accelerate the landing, local industrial projects to accelerate the layout, with a new round of large-scale equipment renewal and consumer goods trade-in, may drive the growth rate of fixed asset investment to further rise.
(This article is from Yicai)
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