In the first quarter of 2024, China's consumption growth slowed down, fixed asset investment was slightly weaker dragged down by real estate investment, and the growth rate accelerated under the strong pull of infrastructure investment and manufacturing investment, and in terms of import and export, with the gradual recovery of overseas demand, the growth rate was better than expected. Driven by the above three drivers, GDP grew by 5.3% in the first quarter.
On April 16, Sheng Laiyun, deputy director of the National Bureau of Statistics, said at a press conference held on the same day that the performance of economic operation indicators in the first quarter was good, which can be evaluated by four key words: continuous recovery, steady start, steady progress, and good start.
For example, Guan Qingyou, president of the Institute of Financial Research and vice president of the China Private Economy Research Association, said that the GDP growth rate of 5.3% has exceeded the market's original expectation of 5%. Due to the relatively low base last year, it is expected that the GDP growth rate in the second quarter of this year will also perform well. Under the premise of macroeconomic policy support and continuous improvement of the external environment, GDP growth is expected to reach 5% this year.
Since 2023, the "temperature difference" between macro data and micro feelings has become the focus of public attention. Sheng Laiyun explained the current unevenness of the economic recovery, which exists in consumption and production, large enterprises and small and medium-sized enterprises, etc.
Sheng Laiyun said that in the next stage, China is still in the stage of structural adjustment, transformation and upgrading, and some enterprises will carry out transformation and upgrading, so everyone will have to bear some pains of transformation. Due to the adjustment of traditional industries and the cultivation of new kinetic energy, it is normal for some economic growth fluctuations to occur, but the quality of development is continuously improving, and high-quality development is constantly improving, which is the fundamental condition of China's economic recovery.
A number of economists interviewed said that this imbalance also comes from the structural contradictions of China's economy, and the solution lies in structural reforms.
Consumption growth has fallen
Consumption is the biggest driver of economic growth in 2023, with total retail sales of consumer goods increasing by 7.2% year-on-year, and final consumption expenditure driving economic growth by 4.3 percentage points, contributing 82.5% to economic growth.
In the first quarter of 2024, the total retail sales of consumer goods increased by 4.7% year-on-year, a decrease of 1.1 percentage points compared with the same period last year. Among them, the total retail sales of consumer goods in March increased by 3.1% year-on-year, down 2.4 percentage points from January to February.
Zhang Liqun, a researcher at the Development Research Center of the State Council, said that the recovery growth of consumption and services last year was affected by the special factors of epidemic prevention and control, which were unsustainable, so industry and investment were the main forces for the sustainable economic recovery this year.
In the first quarter of this year, the CPI increased by 0% year-on-year, of which the year-on-year growth rate of CPI from January to March was -0.8%, 0.7% and 0.1% respectively. From October 2023 to January 2024, the CPI has experienced negative year-on-year growth for four consecutive months.
Zhang Yansheng, chief researcher of the China Center for International Economic Exchanges, said that from the perspective of CPI trends, insufficient demand is the main contradiction of China's economy. If the state does not introduce corresponding countermeasures for insufficient demand, insufficient endogenous power, insufficient macro policy support, etc., the CPI growth rate may remain below 1% this year.
Pan Xiangdong, chief economist of the Qi Rhenium Research Institute, said that the foundation for the continuous improvement of consumption is not yet solid, and the improvement of residents' consumption willingness and consumption capacity requires more policy protection.
Sheng Laiyun said that from the perspective of future trends, CPI will slowly rise at a low level. On the one hand, the economy continues to improve and aggregate demand is rebounding, which is an important fundamental factor supporting the rebound of CPI. On the other hand, the prices of some agricultural products have also reached an inflection point in price adjustment, such as the price of live pigs. The next holiday consumption will also drive the recovery of consumer prices for tourism and travel.
Guan Qingyou described the current consumption situation as a "consumption shift". He said that due to the downturn in the real estate market, the consumption flowing to the real estate market has been transferred to other industries, which in turn has played a role in promoting consumption in some specific industries. It can be seen from this that the main contradiction of the overall weak consumption is not the lack of consumption targets and consumption patterns, but the lack of money for consumption and the lack of fundamental improvement in residents' income expectations.
Guan Qingyou said that the fundamental problem of consumption is a structural problem. In the process of industrial upgrading of China's economy, improving the economic structure will be the most important focus.
Investment has risen steadily
In the first quarter, the national investment in fixed assets (excluding rural households) exceeded 10 trillion yuan, a year-on-year increase of 4.5%, 0.3 percentage points faster than that from January to February, and 0.6 percentage points lower than the growth rate of the same period last year.
Investment sub-sectors continue to diverge. Among them, real estate investment is still the main drag, and real estate development investment fell by 9.5% in the first three months of this year, the lowest level in the same period in the past five years. Despite the successive introduction of various policies, the in-depth adjustment of real estate is still ongoing.
On the other hand, infrastructure investment increased by 6.5% year-on-year in the first quarter, and manufacturing investment increased by 9.9% year-on-year. Pan Xiangdong said that the efforts of policies to stabilize the economy and stabilize domestic demand, such as equipment upgrading and upgrading, as well as the maintenance of short-term resilience of exports, have provided certain support for manufacturing investment. Therefore, short-term manufacturing investment will still maintain a certain growth rate.
In 2024, various regions will begin to actively promote investment growth through various initiatives. At the beginning of the year, Guangdong, Zhejiang, Jiangsu and other major economic provinces or major cities under their jurisdiction held major project commencement activities. On January 2, Nobunaga Xing, Secretary of the Jiangsu Provincial Party Committee, proposed that major projects are the ballast stone for stable economic operation and the hard support for the real girder.
Liu Qiao, dean of Peking University's Guanghua School of Management, once suggested at the Boao Forum for Asia that fiscal policies should be strengthened to support investment. Liu Qiao said that there are many unpredictable things in the second half of this year, including the election of some heads of government, which may affect international trade and the export of Chinese companies, and investment has become important in this situation. At the same time, it is also crucial to maintain a certain level of investment intensity to offset the impact of the decline in real estate investment.
Guan Qingyou said that in the past, it was difficult to sustain the way of relying on investment to drive economic growth, but this does not mean that China does not need to maintain a certain investment growth rate.
Zhang Liqun said that in 2024, it is necessary to give full play to the pulling and amplifying effect of government investment. The role of government is crucial in overcoming the contraction of market-led investment. In particular, it is necessary to give full play to the countercyclical adjustment role of macroeconomic policies, and through significantly increasing the intensity of infrastructure investment, enterprises will noticeably increase their orders, thereby driving the gradual recovery of enterprises' production and investment activities and further promoting the stability of the employment market and the sustained recovery of residents' consumption.
Foreign trade grew steadily
In 2023, China, the world's largest trading nation for seven consecutive years, will begin to be affected by trade fluctuations. According to the National Bureau of Statistics, the total import and export value of goods in 2023 will only increase by 0.2% year-on-year, and the actual use of foreign direct investment in 2023 will be 1,133.9 billion yuan, down by 8.0%, and in US dollar terms, it will decrease by 13.7%.
Domestic and foreign institutions expect global trade to recover further in 2024. The World Trade Organization expects global trade in goods to grow by 2.6% in 2024.
In the first quarter, China's total import and export of goods 101693 billion yuan, a year-on-year increase of 5.0%. However, the total import and export volume fell by 1.3% year-on-year in March, of which exports fell by 3.8% year-on-year.
Pan Xiangdong said that China's foreign trade performance in the first quarter was better than expected, and although it was disturbed by geopolitical and other uncertainties in the short term, there was still support for exports to maintain positive growth. In the second half of the year, as the central banks of Europe and the United States may enter the channel of interest rate cuts, it is expected to further boost overseas commodity demand. At the same time, major economies may enter the replenishment stage one after another, and the resilience of overseas demand will continue to provide strong support for China's subsequent exports.
In response to a reporter's question, Sheng Laiyun said that from the perspective of external demand, the world economy has shown signs of recovery, and exports in the first quarter were better than expected.
Guan Qingyou said that in the first quarter, Vietnam, South Korea and other export-oriented economies performed well in exports, indicating that the external trade environment is improving. However, the import and export environment faced by China is also changing, such as the export of goods is more high-end, the ability of foreign trade to solve employment is weakening, and China's largest trading partner has also changed, so stabilizing exports in the future is still a relatively important task.
The unevenness of the economic recovery
In the above-mentioned press conference, Sheng Laiyun said that the economic recovery is uneven, and the accounting is a summary of the added value of all industries, and it is an indicator that reflects the overall situation.
Sheng Laiyun said that from the perspective of the degree of recovery, China's consumption recovery is not as good as production, and the recovery of small, medium and micro enterprises is not as good as that of large enterprises, so there is an obvious imbalance in economic recovery.
Sheng Laiyun said that in the next step, while continuing to strengthen the foundation for economic recovery, we should further pay attention to the imbalance of economic development, especially the development of small, medium and micro enterprises.
Guan Qingyou said that the temperature difference between macro and micro is still relatively large, and this temperature difference has been reflected in CPI and PPI, and behind the macro and micro temperature difference is the problem of structural distortion.
In order to solve the problem of structural distortion, Guan Qingyou proposed to implement a series of structural reforms that go deep into the institutional mechanism. Guan Qingyou said: "China's economy is now facing great challenges, but with strong resilience and great potential, China's economy has a card to come out, the key is to think clearly about the plan and make up your mind." ”
Zhang Liqun said: At present, the contrast between the macro and micro economies is mainly reflected in the fact that some enterprises are still facing difficulties in their operations, and that the employment market is facing both aggregate and structural pressures, and there is still a clear gap between the goal of achieving full employment.
Zhang Yansheng said that last year's global economic growth was not optimistic, so he personally felt "cold", which is consistent with the macroeconomic trend. However, there are differences in the perception of macroeconomic development among people in different regions and industries. In the process of research, we can see that people in Taizhou, Shenzhen and other economically moderately developed and developed areas will feel "warmer" about economic development.
In Zhang's view, China needs to carry out structural reforms of its institutional mechanisms. He said that between 2024 and 2027, China is likely to experience a period of structural adjustment similar to that of 1998 to 2002. What is needed during the adjustment period is not a package of economic stimulus policies, but a package of policies to solve the problems faced by high-quality development, including solving the shortage of demand in the short term, stabilizing and transforming the model of the real estate and other bulk consumer markets in the medium term, and solving the problems of momentum, structure, institutional mechanism transformation and risk prevention in the long term.
![A press conference was held to promote the high-quality development of the private economy in Qiannan Prefecture[fig]](data:image/gif;base64,R0lGODlhAQABAIAAAP///wAAACwAAAAAAQABAAACAkQBADs=)