Zhao Deyou | Cubic everyone talks about columnists
Not long ago, the National Bureau of Statistics announced the economic operation in the first quarter of 2024. According to preliminary calculations, the GDP in the first quarter was 296299 billion yuan, a year-on-year increase of 5.3% at constant prices. Focusing on the economic data of the first quarter, Zhao Deyou, a specially invited economist and former first-level inspector of the Henan Provincial Bureau of Statistics, interpreted it.
Question 1: The data of 5.3% year-on-year GDP growth in the first quarter is higher than many people's expectations, including the expectations of some ordinary people and many professional institutions. As for the general disparity in economic perception, Dr. Zhao would like to share your views on it.
A: On April 11, Goldman Sachs raised its growth forecast for China's economy in the first quarter of this year and for the whole of this year, raising the year-on-year GDP growth rate in the first quarter to 5.0% from 4.5% in the previous year, and raising the forecast for China's full-year GDP growth in 2024 to 5.0% from the previous value of 4.8%. At the same time, Morgan Stanley also raised its forecast, but the published figure of 5.3% is still higher than Goldman Sachs' revised figure.
The average person's perception of the data is higher than expected, partly because of the difference with the daily sense of economy. From a statistical perspective, GDP growth of 5.3% in the first quarter is supported.
There are three methods of accounting for GDP, namely the production method, the income method, and the expenditure method. GDP is calculated using the production method and verified by the expenditure method.
First, let's look at the industrial support for GDP growth
The first algorithm of GDP is the production method, namely:
GDP = added value of primary industry + added value of secondary industry + added value of tertiary industry
In 2023, the primary, secondary and tertiary industries will contribute 5.7%, 35.5% and 58.8% to GDP growth, respectively, driving economic growth by 0.3, 1.8 and 3.1 percentage points.
In 2023, the added value of the secondary industry will increase by 4.7%, of which the added value of industries above designated size will increase by 4.6%. In the first quarter of this year, the added value of the secondary industry increased by 6.0 percent, of which the added value of industries above designated size increased by 6.1 percent, an increase of 1.3 and 1.5 percentage points respectively over 2023. (See Figure 1, Figure 2)
In the first quarter of 2024, the primary, secondary and tertiary industries will contribute 2.5%, 42.8% and 54.7% to GDP growth, respectively, driving economic growth by 0.1, 2.3 and 2.9 percentage points.
The contribution rate of the secondary industry (mainly industry) to GDP growth will increase by 7.3 percentage points compared with 2023, of which industry will grow by 6% and contribute 37.3% to GDP growth, driving GDP growth by nearly 2 percentage points.
It can be said that in the first quarter, the three industries jointly drove GDP growth, the coordination of the three industries to promote economic growth improved significantly, and China's economy returned to the track of coordinated promotion by the secondary and tertiary industries.
Second, look at the demand support for GDP growth
GDP = Final Consumption Expenditure + Gross Capital Formation + Net Exports of Goods and Services
In 2023, final consumption expenditure, gross capital formation, and net exports of goods and services will contribute 82.5%, 28.9%, and -11.4% to economic growth, respectively, driving economic growth by 4.3, 1.5, and -0.6 percentage points, respectively.
In 2023, it can be said that gross capital formation (mainly fixed asset investment) will make a low contribution to economic growth and a low pull. Net exports of goods and services contribute negatively to economic growth.
In the first quarter of 2024, investment in fixed assets increased by 4.5 percent, an increase of 1.5 percentage points over the previous year. (See Figure 3)
Exports are doing better than expected as the world economy shows signs of recovery. The total value of imports and exports of goods in the first quarter increased by 5.0% year-on-year, 4.8 percentage points higher than that in 2023. Among them, exports increased by 4.9%, 4.3 percentage points higher than in 2023 (see Figures 4 and 5).
In 2023, the total value of imports and exports of services increased by 10.0% year-on-year, of which exports decreased by 5.8%. From January to February 2024, the total value of imports and exports of services increased by 22.8% year-on-year, of which exports increased by 17.9% (see Figures 6 and 7).
In the first quarter of 2024, final consumption expenditure, gross capital formation, and net exports of goods and services contributed 73.7%, 11.8%, and 14.5%, respectively, to economic growth, driving economic growth by 3.9, 0.6, and 0.8 percentage points, respectively. (See Fig. 8 and Fig. 9)
Third, look at the matching between economic prosperity and GDP growth
In the first quarter, the prosperity of China's economic operation rebounded significantly, and the electricity consumption of the secondary industry increased by 8.0%, of which the industrial electricity consumption increased by about 8%, which is a relatively high growth rate in recent years, indicating that the prosperity of the secondary industry, with industry as the main content, has risen.
The official (National Bureau of Statistics) Purchasing Managers' Index (PMI), Caixin Purchasing Managers' Index, China Logistics Index, China Warehousing Index and China SME Index are all upwards and are all operating in the expansion zone. These economic sentiment indices are published in late March or early April. It shows that these institutions are optimistic about economic growth, and at the same time, they are optimistic about the prospects for future economic operation.
For example, GDP grew by 4.5% year-on-year in the first quarter of 2023, 5.3% year-on-year in the first quarter of 2024, and an average growth of 4.9% in the first quarter of two years. In the first quarter of 2023, the industrial enterprises above designated size increased by 3.0% year-on-year, and in the first quarter of 2024, the industrial enterprises above designated size increased by 6.1% year-on-year, with an average growth of 4.5% in the first quarter of two years.
There are also some problems in economic operation, mainly because the foundation for the continuous recovery of some economic indicators is not yet solid, the recovery of demand is not as good as production, the recovery of small, medium and micro enterprises is not as good as that of large enterprises, and there is an obvious imbalance in economic recovery, so everyone may have a certain understanding of how they feel about the data.
Question 2: In the data released this time, the growth of household income outperformed GDP as a major bright spot. In the first quarter, the per capita disposable income of residents nationwide was 11,539 yuan, a year-on-year increase of 6.2%. The median per capita disposable income was 9,462 yuan, a nominal increase of 6.4% year-on-year. Household income growth outpaced GDP, which means that economic growth benefits individuals, and can also promote higher consumption levels and broader economic growth.
Dr. Zhao could please share your views on the development of residents' income and consumption level in the next stage.
A: The core essence of high-quality development is people-centered development. At the Central Economic Work Conference held in December 2017, General Secretary Xi Jinping profoundly elaborated on the scientific connotation of high-quality development, pointing out that the high-quality development of the mainland's economy is a development that can well meet the people's growing needs for a better life. The purpose of development is to continuously protect and improve people's livelihood, and raising people's income level is the essence of ensuring and improving people's livelihood.
Compared with developed countries in Europe and the United States, there is a large gap between the ratio of per capita disposable income to per capita GDP of mainland residents. In order to increase the proportion of household income in national income (GDP), the growth rate of per capita disposable income should continue to be higher than the growth rate of GDP, that is, the nominal and real growth rates of per capita disposable income should continue to be higher than the growth rate of GDP.
In the first quarter of 2024, the per capita disposable income of residents nationwide increased by 6.2% in nominal terms and 6.2% in real terms. GDP grew by 4.0% in nominal terms and 5.3% in real terms. The nominal and real growth rates of per capita disposable income were 2.2 and 0.9 percentage points higher than the nominal and real growth rates of GDP, respectively. (See Fig. 10 and Fig. 11)
In the first quarter, the nominal growth rate of GDP was 4.0 percent, and the nominal growth rate of per capita disposable income and the growth rate of total profits of industrial enterprises above designated size were 6.2 percent and 10.2 percent respectively, which were 2.2 and 6.2 percentage points higher than the nominal growth rate of GDP. In the first quarter, the growth rate of general public budget revenue of comparable caliber in the country was about 2.2%. The above data show that the growth rate of household income and corporate profits is relatively high, and the distribution of national income (GDP) tends to be reasonable (see Figure 12).
Question 3: In the first quarter of 2024, the mainland's national economy continued to pick up and got off to a good start, with GDP growth of 5.3%. We have also noticed that while the growth rate of major economic indicators has picked up and risen, the economic structure is also being adjusted and optimized.
Dr. Zhao could please share his views on the mainland's economic restructuring in the first quarter.
Answer: In the first quarter, the mainland's economy continued to pick up and got off to a good start, and while the growth rate of major economic indicators picked up and rose, the economic structure was also adjusting and optimizing. The economic structure is the proportional relationship between the parts of the economy as a whole, or the proportional relationship between the components of the economic aggregate. In the first quarter, the mainland's economic structure continued to be adjusted and optimized, which was mainly reflected in the following aspects.
First, the adjustment and optimization of the industrial structure. In the first quarter of 2024, the added value of the primary, secondary and tertiary industries accounted for 3.9%, 37.1% and 59.0% of GDP respectively, and in 2023, the added value of the primary, secondary and tertiary industries accounted for 4.1%, 37.8% and 58.1% of GDP respectively, the proportion of the added value of the tertiary industry in GDP increased by 0.9 percentage points, while the proportion of the added value of the primary and secondary industries in GDP decreased by 0.2 and 0.7 percentage points respectively.
The second is the adjustment and optimization of the industrial production structure. In the first quarter, the added value of high-tech manufacturing increased by 7.5%, 2.6 percentage points faster than the fourth quarter of 2023, and 1.4 percentage points higher than the growth rate of industrial added value above designated size. The output of charging piles, 3D printing equipment and electronic components increased by 41.7%, 40.6% and 39.5% respectively year-on-year.
The third is the adjustment and optimization of market sales structure. In the first quarter, the retail sales of services increased by 10.0% year-on-year, 5.3 percentage points higher than the growth rate of total retail sales of consumer goods. Online retail sales increased by 12.4% year-on-year, 7.7 percentage points higher than the growth rate of total retail sales of consumer goods. Among them, the online retail sales of physical goods increased by 11.6%.
Fourth, the investment structure is adjusted and optimized. In the first quarter, investment in high-tech industries increased by 11.4 percent year-on-year, 6.9 percentage points higher than the growth rate of investment in fixed assets. Among them, investment in high-tech manufacturing and high-tech services increased by 10.8 percent and 12.7 percent respectively. In the high-tech manufacturing industry, the investment in aerospace and equipment manufacturing and computer and office equipment manufacturing increased by 42.7 percent and 11.8 percent respectively. Among the high-tech service industries, the investment in e-commerce services and information services increased by 24.6 percent and 16.9 percent respectively.
Fifth, the export structure is adjusted and optimized. In the first quarter, the mainland's import and export of goods to the Belt and Road countries increased by 5.5 percent, 0.5 percentage points higher than the growth rate of the total import and export value of goods. The export of mechanical and electrical products was 3.39 trillion yuan, an increase of 6.8 percent, accounting for 59.2 percent of the total export value, of which computers and their parts, automobiles, and ships increased by 8.6 percent, 21.7 percent, and 113.1 percent respectively. The import and export of cross-border e-commerce increased by 9.6%, of which the export of cross-border e-commerce overseas warehouses increased by 11.8%.
Editor-in-charge: Shi Jian | Reviewer: Li Jinyu | Review: Li Zhen | Supervisor: Wan Junwei