【Guangming Forum】Consolidate the upward trend and promote sustained economic growth

【Guangming Forum】

Authors: Liu Zhiyang and Lu Liangliang (Chief Expert of the Institute of Chinese Modernization, Shanghai University of Finance and Economics, Distinguished Researcher of Shanghai Xi Jinping Research Center for Socialism with Chinese Characteristics for a New Era, Ph.D. Student, Business School, Shanghai University of Finance and Economics)

As China's macro policy combination continues to show results, China's economy will get off to a good start in 2024. According to the latest data released by the National Bureau of Statistics, the gross domestic product (GDP) reached 296299 billion yuan in the first quarter, a year-on-year increase of 5.3% at constant prices, and a quarter-on-quarter increase of 1.6% over the fourth quarter of last year. In terms of production, the added value of the primary industry was 1,153.8 billion yuan, up by 3.3 percent year-on-year, the added value of the secondary industry was 109846 billion yuan, up by 6 percent, and the added value of the tertiary industry was 174915 billion yuan, up by 5 percent. From the perspective of demand, investment in fixed assets increased by 4.5 percent year-on-year in the first quarter, an increase of 1.5 percentage points over the whole of last year, and imports and exports increased by 5 percent, hitting a new high in six quarters. Against the backdrop of increasing uncertainty in global development, the mainland's supply and demand prosperity levels continued to rebound, showing strong endogenous driving force and development resilience.

The formation of new quality productivity has been accelerated, leading the high-quality development of the industrial field. The data shows that in the first quarter, the added value of the high-tech manufacturing industry above designated size increased by 7.5% year-on-year, 2.6 percentage points faster than the fourth quarter of last year, significantly faster than the industrial average, indicating that the industrial structure was further optimized, and the trend of innovation leading the high-quality development of the industrial economy was increasingly emerging. Emerging industries continued to maintain a rapid growth trend. The added value of information transmission, software and information technology services increased by 13.7 percent, an increase of 2.5 percentage points over the fourth quarter of last year, new energy vehicles increased by 29.2 percent, solar cells increased by 20 percent, photovoltaic-related polysilicon and monocrystalline silicon increased by more than 50 percent, service robots increased by 26.7 percent, and semiconductors and 3D printing also maintained high growth of more than double digits. Judging from the data of the first quarter, the characteristics of innovation-driven, green and clean in the industrial field are becoming more and more distinct.

The virtuous cycle of "employment-income-consumption" has accelerated and is spiraling. According to the data, the average surveyed unemployment rate in urban areas in the first quarter was 5.2%, down 0.3 percentage points from the same period last year, and the economic improvement strongly supported the improvement of employment. In the first quarter, the per capita disposable income of residents nationwide increased by 6.2 percent, and the income growth rate continued to maintain a trend of slightly faster than the GDP growth rate, and the mainland's income distribution pattern continued to be optimized, laying a solid income foundation for unleashing consumption potential; the income of rural residents increased by 7.7 percent year-on-year, faster than the 5.3 percent of urban residents, and the income gap between urban and rural areas was further narrowed; and the growth of wage income of urban and rural residents was faster than the growth of overall income, reflecting the stability of the labor and employment market. In the first quarter, the total retail sales of consumer goods exceeded 12 trillion yuan, a year-on-year increase of 4.7 percent, contributing 73.7 percent to economic growth. Driven by new technologies, online consumption continued to be strong, with online retail sales of physical goods up 11.6%. Expenditure on transportation and communications, education, culture and entertainment, and other developmental consumption and enjoyment consumption all grew at double-digit rates, and upgraded consumption continued to improve.

At the same time, we must also be soberly aware that the growth rate of the output value of small, medium and micro enterprises in the first quarter was lower than that of large enterprises, and the growth rate of total retail sales of consumer goods was lower than the economic growth rate of 5.3%. These data show that there are still problems such as unbalanced economic recovery, insufficient effective demand, and unstable foundation. To continue to consolidate and enhance the positive trend of economic recovery, it is still necessary to persist in seeking progress while maintaining stability, promoting stability through progress, and establishing first and then breaking down.

First, the effective market and the promising government work together. Historical experience shows that properly handling the relationship between the government and the market is the key to optimizing the economic structure and changing the driving force of growth. Similarly, the synergy between an efficient market and a promising government is crucial to boosting effective demand. The holiday economy and cultural tourism economy continue to be hot, reflecting the changes and development of the consumption field. To promote the further expansion of the scale of consumption, on the one hand, it is necessary to give full play to the decisive role of the market in the allocation of resources, and continuously nurture new formats, new models, and new scenarios of consumption through free market competition. On the other hand, it is necessary to actively play the role of the government to promote large-scale equipment renewal and the trade-in of consumer goods, strive to cultivate new demand for market upgrading, improve the income distribution mechanism, increase factor remuneration, promote the diversification of residents' income sources, improve residents' consumption capacity, stimulate consumption potential, and enhance consumer confidence.

Second, it is necessary to develop new quality productive forces in the light of local conditions. At present, the mainland is in the critical stage of structural adjustment and transformation, and economic development should be measured by the effectiveness and quality of structural adjustment. With the goal of cultivating new quality productive forces, policies in various fields should work in the same direction, establish a new type of production relationship that is coordinated, effective, intrinsic and organic, and promote the concentration of resource elements in high-quality and efficient fields. Coordinate short-term growth and long-term layout, stimulate the vitality of business entities, focus on the long-term promotion of industrial and supply chain optimization and upgrading, focus on cultivating emerging industries and future industries, and make the innovation and development of the digital economy a powerful starting point for building a modern industrial system.

Third, accelerate the integration and development of large and medium-sized enterprises. Micro, small and medium-sized enterprises are a new force in national economic and social development. Actively build a platform to form a collaborative innovation force, promote the effective supply of scientific and technological achievements, smooth the docking channels of technology supply and demand, and accurately serve small, medium and micro enterprises from the aspects of market expansion, talent introduction and cultivation, financing promotion, and management improvement. Encourage large enterprises and small, medium and micro enterprises to jointly build industrial collaboration platforms, support small and medium-sized enterprises to integrate into industrial chain governance organizations such as industrial alliances established by large enterprises, give full play to the data advantages of platform enterprises, and help small and medium-sized enterprises reduce the impact of lack of data, lack of credit, lack of guarantees, etc. on financing.

Guangming Daily (2024-04-18 02 edition)

Source: Guangming Network - "Guangming Daily"

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