■Wang Dezhong
On April 16, macroeconomic data released by the National Bureau of Statistics showed that in the first quarter, the mainland's gross domestic product (GDP) grew by 5.3%, achieving a "good start". The Central Economic Work Conference held at the end of December last year put forward the requirements of "seeking progress while maintaining stability, promoting stability with progress, and establishing first and then breaking down" when deploying the economic work in 2024, which has become the policy direction for promoting various economic work this year. The overall economic start in the first quarter was good, and the performance of various sub-economic indicators was relatively balanced, fully reflecting the pattern of "stability" and "establishment" under the new situation and new requirements, which undoubtedly laid a solid foundation for strengthening confidence, improving expectations, and breaking down deep-seated obstacles and continuing to promote key work in the next step.
GDP growth in the first quarter fully reflects the "seeking progress while maintaining stability" and "promoting stability through progress"
In the past three years, that is, from 2022 to 2024, the year-on-year growth rates of mainland GDP in the first quarter were 4.8%, 4.5% and 5.3% respectively, and the growth level in the first quarter of 2024 was the highest in the past three years, indicating that the mainland economy has generally maintained a stable and continuous good momentum in the process of post-epidemic recovery, and fully demonstrated the effectiveness of the mainland economy in adhering to the general tone of seeking progress while maintaining stability. Since the CPC Central Committee put forward the general tone of the work of seeking progress while maintaining stability, it has been more than 10 consecutive years since the CPC Central Committee promoted economic development around "stability." This has become the key word in the mainland's economic policy and economic development, and its connotation is gradually changing with the emergence of the new situation and the adjustment of the focus of work.
At the beginning of the proposal, the strategy of "seeking progress while maintaining stability" was mainly to deal with many domestic and foreign uncertainties encountered in the process of economic recovery after the impact of the international financial crisis. This situation has changed after the Sino-US trade friction in 2018, and the pressure brought by changes in the external environment has increased sharply, and the impact of the epidemic outbreak has further increased the difficulty of "stabilization". It can be seen from this that the growth of the mainland's economy in the first quarter of this year is the result of maintaining strategic determination, persisting in making achievements over a long period of time, and accumulating steadily, under the influence of changes in internal and external factors over a long period of time. At the same time, it should also be recognized that although the GDP growth rate in the first quarter was 5.3 percent, which was higher than the historical period in the past two years and also higher than the annual growth target set in this year's "Government Work Report," this achievement does not mean that the deep-seated contradictions and problems existing in the mainland's economy have been thoroughly resolved.
New quality productivity leads industrial transformation and upgrading
The quantitative change is stable and rising, and the qualitative change is beginning to appear
In the first quarter of 2024, as the "combination punch" effect of macro policies continued to be released, the added value of industrial enterprises above designated size increased by 6.1% year-on-year, and industrial production grew steadily. More importantly, a series of sub-indicators reflecting the new quality of productivity have performed well, highlighting the continuous transformation and upgrading of the mainland's economy. The added value of high-tech manufacturing increased by 7.5%, 1.4 percentage points higher than the average level of all industries above designated size, and 2.6 percentage points faster than the fourth quarter of 2023. In the high-tech manufacturing industry, the added value of intelligent vehicle equipment manufacturing, semiconductor device special equipment manufacturing, integrated circuit manufacturing and other industries increased by 61.5%, 40.6% and 18.5% respectively. In terms of the "four integrations", 421 national intelligent manufacturing demonstration factories have been cultivated across the country, nearly 10,000 digital workshops and smart factories have been built, and the intelligent level of the manufacturing industry has been significantly improved. In terms of green development, the market share of new energy vehicles exceeded 31% in the first quarter, the energy consumption of industrial units above designated size in traditional industries such as iron and steel and non-ferrous metals continued to decline, and application scenarios such as hydrogen energy and new energy storage were rapidly expanded.
From the perspective of development stage, China's economy is in a period of transformation and upgrading, and the transformation of old and new kinetic energy is the main theme of this period. At present, one of the key reasons for the mainland's emphasis on "seeking progress while maintaining stability" is that the role of the old drivers in promoting economic development is gradually weakening, and the energy level of the new drivers is not enough to provide support for the entire economic growth. Judging from the industrial development in the first quarter of this year, the mainland's new quality productivity is accelerating its formation, promoting the continuous optimization of the industrial structure in the direction of digitalization, intelligence, and low-carbonization.
New consumption and new investment promote the upgrading of domestic demand
The "triple pressure" has been significantly alleviated, and the vitality of domestic demand continues to burst out
Since 2022, the mainland's economic and social development has faced the "triple pressure" of supply shocks, demand contraction, and weakening expectations, and insufficient domestic demand has become an important factor restricting the steady recovery and continuous improvement of the mainland's economy. To this end, the Central Economic Work Conference at the end of that year put forward the requirement of "taking the lead in stability and seeking progress while maintaining stability" to steadily resolve the "triple pressure" and ensure the steady recovery of the macroeconomy.
From the perspective of consumption, the total retail sales of consumer goods in the first quarter of 2024 will be 120327 billion yuan, a year-on-year increase of 4.7%, and the number of domestic tourism trips and total spending during the Spring Festival holiday will increase by 34.3% and 47.3% year-on-year respectively. A new trend in the field of consumption is that the new vitality of consumption such as cultural consumption and digital and intelligent consumption continues to stimulate the effective demand of residents. Cultural heritage and digital and intelligent elements have opened up the innovation space of consumer products, and a large number of high-quality, personalized and diversified tourism and cultural brands have emerged, which has stimulated the new vitality of cultural tourism consumption to a large extent.
On the investment side, in the first quarter of 2024, the national fixed asset investment increased by 4.5% year-on-year, 1.5 percentage points faster than the previous year, and increased by 9.3% after deducting real estate development investment, indicating that the investment side is making steady efforts and the dependence on real estate in investment demand is steadily decreasing. In addition to the growth in volume, the investment structure also showed a trend of continuous optimization, with investment in high-tech industries increasing by 11.4 percent year-on-year, of which investment in aerospace aircraft and equipment manufacturing, computer and office equipment manufacturing increased by 42.7 percent and 11.8 percent respectively. In the first quarter of this year, another important signal appeared, that is, the manufacturing purchasing managers' index reached 50.8% in March, returning to above the boom and bust line after six months, the best level since March last year, indicating that the mainland's industrial investment expectations are improving. This improvement can be confirmed by the index of business activity expectations, which in March was 55.6%, which also continued to remain in the high boom range.
Overcoming multiple difficulties, the import and export trade was better than expected
The structure of foreign investment and foreign trade continued to be optimized
In the first quarter of 2024, the total import and export value of goods in mainland China reached 101693 billion yuan, a year-on-year increase of 5.0%. Among them, exports were 5,737.8 billion yuan, up by 4.9 percent, and imports were 4,431.5 billion yuan, up by 5.0 percent. It is worth noting that this is the first time that China's import and export of goods trade has exceeded 10 trillion yuan in a single quarter, and the growth rate has hit a new high in six quarters. In recent years, the mainland's total foreign trade volume has maintained a sustained growth trend. According to data released by the General Administration of Customs, the mainland's total foreign trade volume increased from US$4,577.9 billion in 2019 to US$5,936.8 billion in 2023, an increase of nearly 30%. Moreover, judging from the actual situation of the mainland's foreign trade, 2023 may be the most severe year for the foreign trade situation in the past ten years, and import and export enterprises have generally experienced difficulties such as reduced orders, overstocked inventory, and rising costs of imported raw materials. In this sense, it is particularly commendable that foreign trade has achieved a "good start" in the first quarter. In addition to maintaining sustained growth in the total volume of imports and exports, the mainland's foreign trade structure is also being further optimized, with exports of mechanical and electrical products increasing by a large margin in the first quarter, and general trade maintaining a relatively rapid positive growth relative to processing trade. Overall, the mainland's foreign trade in the first quarter exceeded expectations and achieved a phased "qualitative increase", laying a solid foundation for completing the goal of "stable qualitative increase and quantity" for the whole year.
In terms of foreign investment, according to the data provided by the Ministry of Commerce, the actual use of foreign capital in the first quarter of this year was 301.67 billion yuan, which was still at a historical high, and the number of newly established foreign-funded enterprises in the quarter was 12,000, an increase of 20.7 percent, of which the proportion of investment in high-tech manufacturing reached 12.5 percent, an increase of 2.2 percentage points year-on-year. It can be expected that with the gradual arrival of funds for the newly established foreign-funded enterprises, foreign investment in the mainland will receive more solid support. In addition, according to the data disclosed by the State Administration of Foreign Exchange, in the first quarter of this year, the investment funds received by foreign investors in the mainland securities market increased sharply year-on-year, with an increase of 36.1 percent, and the growth rate showed a trend of gradual expansion from January to March, indicating that foreign investors expect the trend of the mainland capital market to stabilize and improve.
Adhering to the people's livelihood as the priority, the employment level has improved significantly
The growth rate of household disposable income outperformed GDP
In the first quarter of 2024, the average surveyed urban unemployment rate nationwide was 5.2%, down 0.3 percentage points from the same period last year. With the improvement of the employment situation, the per capita disposable income of residents across the country has increased steadily. According to the data, in the first quarter, the per capita disposable income of residents in the country was 11,539 yuan, a year-on-year increase of 6.2%, significantly higher than the GDP growth rate. Among them, the per capita disposable income of urban residents increased by 5.3 percent year-on-year, which was the same as the GDP growth rate, and the per capita disposable income of rural residents increased by 7.7 percent year-on-year, which was significantly higher than the GDP growth rate. The growth rate of household income exceeded the growth rate of GDP, which indicates that the fruits of economic growth have been more fully shared in the urban and rural sectors. In line with this data, this year's "Government Work Report" deleted the word "basic" in the expected target for many years, "the growth of residents' income and economic growth are basically synchronized", highlighting the country's determination and policy guidance to promote the faster growth of residents' income.
Income increase is the premise and foundation for promoting consumption, and high-quality employment is the guarantee for increasing income. "Seeking progress while maintaining stability" not only needs to improve the supply side through continuous innovation and fundamentally improve the overall productivity, but also needs the cooperation of the demand side, and the key is to make the fruits of high-quality development better shared in the whole society and significantly increase the disposable income of residents. With the sustained recovery of the economy and the overall improvement of the employment situation in the first quarter, the income of mainland residents is expected to maintain steady growth, which will also strongly support the improvement of residents' consumption capacity and provide a solid foundation for sustained and stable economic growth.
To sum up, the mainland economy has achieved more than expected growth in the first quarter of 2024, with the overall economic operation stable and rising, the economic structure continues to be optimized, and the market vitality has been enhanced, highlighting its strong resilience. With the recovery of the world economy driving the increase in external demand, coupled with the gradual implementation of a series of domestic policy measures, it is foreseeable that China's economy is expected to continue to recover significantly in the coming period. Of course, we must also be soberly aware that at present, the international situation is still complex and severe, the domestic economy and industry are still in the process of kinetic energy transformation and structural adjustment, the foundation for stabilizing domestic demand needs to be further consolidated, the confidence of various market players must be further consolidated, and there are still risk points in some areas. In the face of these risks and challenges, it is still necessary to firmly grasp the requirements of "seeking progress while maintaining stability, promoting stability through progress, and establishing first and then breaking down", continue to enhance the overall confidence of the market and the momentum of economic operation, strengthen the counter-cyclical and cross-cyclical adjustment of macroeconomic policies, consolidate the foundation for a sustained economic rebound, and ensure the smooth realization of the mainland's economic growth target of about 5 percent this year with sufficient confidence.
(The author is president and researcher of the Shanghai Academy of Social Sciences)
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