In the first quarter of 2024, China's GDP was 296299 billion yuan, a year-on-year increase of 5.3% at constant prices, and the national economy continued to pick up and got off to a good start. Both supply and demand, external and internal, the main economic variables have continued to improve, and the recovery momentum has become clearer due to the improvement of the economy and the upward expectations. The economic structure is becoming better in the midst of changes, and the formation of new quality productive forces is accelerating, which has strengthened the confidence and self-confidence of China's economy to cross the dangerous shoal and wade through the torrent. Looking ahead, China's economy will not change its overall trend of stability and long-term improvement. As more advantages continue to be unleashed and potentials continue to be unleashed, China's economy will cultivate more long-term growth advantages on the basis of achieving short-term economic recovery and prosperity.
Good start "Warm" wind blows
On the basis of the successful completion of the main goals and tasks of economic and social development in 2023, China's economic operation in the first quarter of 2024 has started well, and the foundation for sustained economic recovery and continuous improvement is being strengthened and a trend is taking shape, laying a good foundation for the completion of the annual economic and social development goals.
In terms of total volume, growth has accelerated, and expectations are improving. In the first quarter of 2024, China's GDP grew by 5.3% year-on-year and 1.6% quarter-on-quarter from the fourth quarter of 2023, higher than the target set for the whole of 2024. In March, the national manufacturing purchasing managers' index (PMI) returned to the expansion range, and the service PMI was the highest since July 2023, reflecting the continued strengthening of market expectations and development confidence. Coincidentally, recent research reports by Goldman Sachs and Citigroup have raised their forecasts for China's economic growth in 2024, and they are optimistic about China's prospects for achieving its economic growth target in 2024. The "vote of confidence" cast by international institutions on China's economic growth shows that they are optimistic about China's economic growth in 2024 and have confidence in China's economic resilience, which remains the "engine" of world economic growth.
From the perspective of demand, investment taps potential and consumption improves quality. In the first quarter of 2024, the national investment in fixed assets increased by 4.5% year-on-year, 1.5 percentage points faster than that of the whole year of 2023, of which the purchase of construction and installation projects and equipment and tools increased by 4.6% and 17.6% year-on-year respectively, reflecting that the market has entered the stage of actively replenishing inventory, expanding production capacity, and tapping potential, which is also an important background for the central government to propose large-scale renewal and transformation of equipment. Consumption is the "ballast stone" of economic growth, and the fundamental role of consumption in driving economic growth has been continuously enhanced. In the first quarter, the total retail sales of consumer goods increased by 4.7% year-on-year, while online retail sales increased by 12.4% year-on-year, indicating that the consumer market is still active driven by online consumption and digital marketing. The consumption structure has been continuously upgraded, service consumption has become the choice of more consumers, the enthusiasm for holiday travel is high, the number of people entering and leaving the country is gradually returning to normal, and the box office revenue of holiday movies has repeatedly reached new highs.
From the perspective of supply, industry has rebounded and employment has stabilized. In the first quarter of 2024, the added value of industrial enterprises above designated size increased by 6.1% year-on-year, of which the added value of manufacturing increased by 6.7% year-on-year. The added value of high-tech manufacturing increased by 7.5%, 2.6 percentage points faster than the fourth quarter of 2023. From January to February 2024, the total profit of industrial enterprises above designated size in the country reached 914.1 billion yuan, a year-on-year increase of 10.2%. The industrial rebound is also reflected in the outlook for the future, with medium- and long-term loans to the manufacturing sector increasing by 28.3% year-on-year at the end of February 2024. With the launch of a new round of large-scale equipment renewal policies, industrial production is expected to usher in a rapid growth cycle with the support of domestic and foreign demand recovery and investment in fixed equipment transformation. In the first quarter, the average surveyed unemployment rate in urban areas was 5.2 percent, down 0.3 percentage points year-on-year. Considering that the employment cycle generally lags behind the production cycle, employment is expected to improve further as industrial production enters the expansion track.
From an external point of view, foreign trade has increased steadily, and foreign capital has flowed in. In the first quarter of 2024, the mainland's import and export of goods increased by 5.0% year-on-year. Among them, exports increased by 4.9% and imports increased by 5.0%. The import and export of private enterprises increased by 10.7 percent, the import and export to the Belt and Road countries increased by 5.5 percent, and the export of mechanical and electrical products increased by 6.8 percent. In March, China's manufacturing PMI indicators included 51.3% and 50.4% of the new export orders index and import index, up 5.0 and 4.0 percentage points month-on-month, both of which rose to the expansion range. The import and export structure has been continuously optimized, and the resilience of foreign trade has been improved under the external environment. From January to February 2024, the actual amount of foreign capital utilized by the mainland will be more than 100 billion yuan, and the continuous inflow of foreign capital will inject new vitality into China's economy, indicating that China is still a hot spot for foreign investment and the first choice for entrepreneurship. Chinese capital has stepped up its efforts to go overseas and deeply participated in the division of labor in the global industrial chain and value chain, which has provided a broader market and more sufficient confidence for the growth of Chinese enterprises, and also created new opportunities and added new impetus to the development of countries around the world.
Transformation accelerates the "new" wind
The economic rebound is a process of wave-like development and zigzag progress. The outlook depends on the optimization and upgrading of the economic structure and the continuous conversion of new and old kinetic energy. The promotion of new industrialization is conducive to promoting digitalization, networking, and intelligence, and provides a driving force for the upgrading of old kinetic energy and the continuation of new kinetic energy. Breaking through the blockages of the economic cycle will help to grasp the new opportunities for consumption upgrading in the smooth domestic circulation. In addition, new consumption is becoming more and more important to improve the level of supply and drive economic growth.
There are many bright spots in the transformation of new industrialization. The digital economy is booming, and digital industrialization and industrial digitalization are advancing in synergy. In the first quarter of 2024, the mainland's investment in high-tech industries increased by 11.4% year-on-year, of which the investment in aerospace aircraft and equipment manufacturing, computer and office equipment manufacturing increased by 42.7% and 11.8% respectively, indicating that new industries and new infrastructure such as 5G and artificial intelligence are accelerating their construction and are being further promoted in various fields. As a representative of the development of new quality productivity, the application of new technologies such as 5G and artificial intelligence has also promoted the upgrading and transformation of traditional industries, and also cultivated new industries, new kinetic energy and new advantages. In the process of developing new quality productive forces, all localities have adhered to local conditions and differentiated development, and cultivated industries with special advantages, which not only realized the two-wheel drive of traditional industries and strategic emerging industries, but also promoted the continuous transformation of growth momentum.
Personalized consumption has gradually become a hot spot for consumption. With the steady increase in residents' income, mainland residents' consumption has shifted from focusing on quantitative satisfaction to pursuing qualitative improvement, and from imitation-type consumption to personalized, customized and diversified consumption. In the first quarter of 2024, the per capita disposable income of residents across the country will grow by 6.2% in real terms, higher than the GDP growth rate. In the first quarter, traditional consumption such as commodity retail and catering achieved rapid growth, and upgraded categories such as sports and entertainment goods and communication equipment increased by 14.2% and 13.2% respectively. In the first quarter, the retail sales of services in mainland China increased by 10.0% year-on-year, the "Erbin fever" and "Spring Festival tours" were crowded, and the retail sales of representative "trendy products" such as digital, green and health products grew hotly, and the consumption of new goods and services gradually became the main driving force for consumption growth.
The private economy continues to grow and develop. Since 2024, the private economy has continued to pick up and improve. From January to February, private investment in mainland China accounted for 52.6% of total investment, an increase of 2.2 percentage points over the whole of 2023. Private investment grew by 0.4%, reversing the negative growth that had been in place since the first five months of 2023. The added value of small and medium-sized industrial enterprises above designated size increased by 8.7% year-on-year, which was higher than the growth rate of all industrial enterprises above designated size. The Standard Chartered China SME Confidence Index (SMEI) rose to 51.6 in March from 50.9 in February, the highest level since May 2023. With the introduction and implementation of more policies to support the development of the private economy, the role of the private economy as a new force in promoting Chinese-style modernization will be further demonstrated, and the foundation for the high-quality development of the private economy will be more solid.
Strengthen confidence and move forward for the better
Judging from the situation in the first quarter of 2024, China's sustained economic recovery is not accidental, but stems from the strong resilience and development potential of China's economy. The reason why China's economic giant ship is "wide on both sides of the strait, and the wind is hanging" and is advancing steadily and steadily in the great tide of the world economy lies in the short-term policy support and long-term advantages and momentum accumulated by the continuous efforts.
In the short term, China's economy has a lot of room for policy, and the package to promote a sustained economic rebound is gaining momentum. Since 2024, China has successively introduced a series of policy measures to promote China's economic warming and recovery. These policies have been born to solve practical problems and practical difficulties in economic development, and they have played an important role in stabilizing the positive trend of the mainland's economic development. With the implementation of various policies and measures, the positive factors in economic operation continue to accumulate, the trend of China's economy is taking shape, and more new progress will be made in high-quality development.
From a long-term point of view, China's economy has the advantages of "people, money, and materials" accumulated since the beginning of reform and opening up. From the perspective of "people", the massive human capital contained in the mainland's population of more than 1.4 billion is an important support for China to seize the opportunities of a new round of scientific and technological revolution and industrial transformation, and to accelerate the extensive and in-depth application of new technologies. From the perspective of "finance", accelerating investment in frontier fields such as digital technology in the process of new industrialization to ensure that capital supply is always in line with the development trend of science and technology, will help the latter always be in the world's advanced or cutting-edge ranks. From the point of view of "things", the mainland has a super-large-scale market, whether it is to stimulate potential consumption or expand profitable investment, this important market advantage means a broad market space and cooperation opportunities, providing a guarantee for the best use of "things".
Of course, it should also be noted that although China's economy is off to a good start in 2024, there are still some difficulties and challenges in further consolidating and enhancing the upward trend of the economy. The main reasons are the lack of effective demand, overcapacity in some industries, weak social expectations, still many risks and hidden dangers, the domestic cycle has blockages, and the complexity, severity and uncertainty of the external environment have risen. Although there are thorns, reefs, and dangerous shoals on the way forward, they cannot stop the determination and perseverance of China's economic giant ship to sail into the deep sea. As long as we persist in seeking progress while maintaining stability, promoting stability through progress, establishing first and then breaking down, deepen institutional and institutional reforms, make good use of the policy "toolbox", and use development methods to solve problems in development, we will be able to promote China's economy to move forward steadily and strides forward on the road of high-quality development.
(The author is a researcher and deputy director of the Bureau of Personnel and Education, Chinese Academy of Social Sciences, and an associate researcher at the Institute of Economics, Chinese Academy of Social Sciences)
Source: "China Social Science Daily" Issue 2880 on April 25, 2024 Author: Yuan Lei Zhang Peng
![Zhang Wei, Chairman of Cornerstone Capital: The foundation of China's economic prosperity has not changed, and the development of hard technology has ushered in a double window of opportunity[fig]](data:image/gif;base64,R0lGODlhAQABAIAAAP///wAAACwAAAAAAQABAAACAkQBADs=)