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As an important indicator to measure the growth of economic activities in a country, GDP growth has always been one of the data that people pay the most attention to.
On April 16, the National Bureau of Statistics announced that GDP in the first quarter of 2024 increased by 5.3% year-on-year, with an expected increase of 4.9%. It should be said that in the context of complex and severe risks and challenges abroad and downward pressure brought about by the intertwining of multiple domestic factors, this data is not easy to come by.
What is the concept of this data?
This figure is not only higher than the 5.2 percent growth rate of last year's economy, but also exceeds the annual economic growth target of about 5 percent announced during the two sessions this year. Considering that the base of GDP growth in the first quarter of 2023 is not low, this result opens up a new situation for economic growth throughout the year. The growth rate of 5.3%, even if you look at the world, is also a bright presence in the recent economic report cards of some major economies in the world in the first quarter, and it has full gold content.
In addition to the GDP growth data that everyone is most concerned about, a package of economic data for the first quarter and March of 2024 was also announced: GDP increased by 5.3% year-on-year in the first quarter, with an expected increase of 4.9%, industrial added value increased by 4.5% year-on-year in March, with an expected increase of 5.3%, a cumulative increase of 4.5% year-on-year in fixed asset investment from January to March, with an expected increase of 4.4%, and a year-on-year increase of 3.1% in March, with an expected increase of 4.8%.
The above data reveals a variety of economic information and development trends, and those who are not sensitive to data may not see much at first glance. Let's talk to you about these data today.
The Speed and Impact of Economic Growth: Why Is Economic Growth Important?
The speed of China's economic growth means multiple levels of influence and signal. As the world's second-largest economy, China's economic growth rate has a significant impact on the global economy. China's rapid growth is not only driving global trade and investment activity, but also reflecting the extent to which domestic economic activity is expanding, affecting employment, income, and living standards, which are closely related to us. In the first quarter of 2024, driven by factors such as the rapid recovery of service consumption, the overall stabilization and rebound of external demand, and the efforts of stable growth policies, various economic indicators started smoothly at the beginning of the year, showing the resilience and potential of China's economy.
For an economy as large as China, 1% of China's economic growth represents a significant scale. According to data released by the National Bureau of Statistics, China's gross domestic product (GDP) will exceed 126 trillion yuan in 2023, a year-on-year increase of 5.2%. This means that China's economy has increased by more than 6 trillion yuan. At the current exchange rate, this is equivalent to the total economic output of a medium-sized country in one year.
Specifically, for every 1% growth in China's economy, it adds about 1.26 trillion yuan (based on a 126 trillion base). This figure can be more intuitively reflected in the comparison of different countries. Using 2023 data as an example, if you compare every 1% increment of China's economy with other economies, you can see that this size may be equivalent to the annual GDP of some middle-income countries or even higher-income countries.
In addition, according to the 2023 Global Finance and Development Report released by the International Finance Forum (IFF), China's contribution to world economic growth is expected to exceed 30%, making it the largest engine of world economic growth. This shows that China's 1% economic growth is not only significant at home, but also has a significant impact on the global economy.
As we all know, rapid growth tends to boost market optimism, and slowing growth can lead to market concerns. The GDP growth rate of 5.3% in the first quarter of this year has a very important impact on the positive confidence of domestic and foreign investors. Confidence is more important than gold! This year's good start has stabilized market expectations to a great extent, and to a certain extent, it has provided us with room for operation in economic regulation and control, structural reform, and industrial upgrading in the second three quarters of this year, and has also eased the pressure.
The two-wheel drive of industry and service industry, high-tech industry has become a new engine of industry
Thanks to the continuous efforts of the mainland's policies to stabilize expectations, growth and employment, the four major macro indicators of growth, employment, inflation and balance of payments have remained stable on the whole, demonstrating the vitality of China's economy and the fundamentals of long-term improvement. In terms of growth structure, the gross domestic product (GDP) in the first quarter increased by 5.3% year-on-year, of which the added value of the primary industry increased by 3.3% year-on-year, the secondary industry increased by 6.0%, and the tertiary industry increased by 5.0%. This indicates that the contribution of the secondary industry to GDP growth is significant.
In terms of categories, in March 2024, the added value of industrial enterprises above designated size increased by 4.5% year-on-year, an increase of 17.2 percentage points from the previous month, and the year-on-year growth rate of industrial added value above designated size increased significantly in the same month. Among them, the added value of high-tech manufacturing increased by 7.5%, which is significantly higher than the growth rate of the overall industrial added value, and the contribution rate of related high-tech industries to economic growth can be seen, which also shows that high-tech industries are becoming a new engine to promote economic growth.
Judging from the data of other indicators released, domestic industrial production and manufacturing investment are the main drivers of economic growth. As ordinary people, the high-tech industry in the industry can be understood as a "high-tech industry" to a large extent, and the growth of related fields will have a beneficial impact on the growth of the subsequent year. China's industrial output is expected to expand further and steadily, and at the same time, through policy-guided equipment modernization and consumer goods trade-in, industrial categories may further increase their contribution to economic growth.
Here is an explanation of "industry above designated size", since this is a term used in economic statistics in China, so many people do not know much, it refers to industrial enterprises that have reached a certain scale standard. Generally speaking, industrial enterprises above designated size usually refer to those industrial enterprises whose annual main business income reaches or exceeds 20 million yuan. This definition is used to distinguish between large enterprises and small and micro enterprises, so as to more accurately reflect the operation of the industrial economy in statistical analysis. Therefore, it can be seen that the development of large domestic enterprises is constantly returning to the fast lane. This provides good support for the increase in the employment rate. In contrast, in the first quarter, the average surveyed unemployment rate in urban areas nationwide was 5.2 percent, down 0.3 percentage points from the same period last year. The improvement of employment is related to the stability of society and the improvement of residents' happiness, and I believe that this data can be perceived more clearly by us in life.
China's economy has been improving for a long time, but it is still full of risks and challenges
The contribution of the service industry to China's economy is also a force to be reckoned with. During the New Year's Day and Spring Festival holidays in 2024, the number of domestic tourists will be 109% and 119% year-on-year to the same period in 2019, respectively. Due to the Lunar New Year in January and February, domestic tourism spending and movie box office both increased, greatly exceeding pre-pandemic levels. Smartphone sales are also rising, especially local mobile phone sales, and Chinese consumers are increasingly inclined to choose local brands. The Qingming holiday just passed was a good continuation of the tourism boom, with good growth in the number of holiday trips and tourism revenue, of which per capita consumption exceeded the level of the same period in 2019 for the first time. I believe that everyone has experienced the recovery of tourism, a few days ago the author went to Hangzhou, in some of the niche attractions that are not well-known also felt a crowd of people, which makes people think that they are in a 5A large scenic spot.
In addition, the information transmission, software and information technology services industry increased by 13.7% year-on-year in the first quarter, showing a strong momentum of development. The leasing and business services sector also increased by 10.8% year-on-year, reflecting the important position of the service sector in economic growth. This series of data reflects the sustained recovery and high-quality development of the domestic economy.
Of course, we should also note that while the fundamentals are stable and improving, there are still some problems and deficiencies in China's economic development. For example, inflation has yet to recover in the first quarter. According to modern economic theory, appropriate inflation is good for economic development. Nominal GDP grew by about 4% in the first quarter. According to the analysis of domestic securities institutions, this is mainly affected by PPI, and there is still pressure on corporate profit margins under the overall price exchange. The contrarian rise in manufacturing investment also brings concerns about some idle capacity - industrial capacity utilization in the first quarter fell further, only higher than in March 2020 during the epidemic. For example, the real estate market is still declining in the first quarter, and the consumption of goods is weak, which still has an impact on the current economy.
In addition, China's economic development is also facing a complex international environment of "decoupling and breaking chains" in Western countries, and considering factors such as the base, there is still great pressure on China to achieve its economic growth target this year. We must also have a clear understanding of the above-mentioned unfavorable factors.
However, despite some risks and challenges, China's economy is resilient, has great potential and vitality, and its long-term positive fundamentals remain unchanged. Only by persisting in development can we continue to overcome the difficulties and challenges in the process of moving forward, and China's economy will be able to cope with various risks and challenges and achieve a long-term positive development trend. In the future, China's economy will continue to advance on the path of high-quality development and make greater contributions to global economic growth, and the fruits of economic development will also benefit every hard-working worker on the job. (Author: Gu squad leader is here)