National Economy of China Showed Good Momentum of Recovery in the First Half Year

July 17, 2023

In the first half year, faced with complex and grave international environment as well as arduous tasks to advance reform, development and ensure stability at home, under the strong leadership of the Central Committee of the Communist Party of China (CPC) with Comrade Xi Jinping at its core, all regions and departments strictly implemented the decisions and arrangements made by the CPC Central Committee and the State Council, adhered to the general working guideline of making progress while maintaining stability, fully and faithfully applied the new development philosophy on all fronts, accelerated the efforts to foster a new development pattern, focused on promoting high-quality development, better balanced domestic and international imperatives, coordinated the work of COVID-19 prevention and control with economic and social development, ensured both development and security, and gave priority to ensuring stable growth, employment and prices. As a result, the market demand gradually recovered, production supply continued to increase, employment and price were generally stable, and residents income grew steadily. The national economy showed a good momentum of recovery.

According to preliminary estimates, the gross domestic product (GDP) in the first half year reached 59,303.4 billion yuan, up by 5.5 percent year on year at constant price, or 1.0 percentage point faster than that in the first quarter of 2023. By industry, the value added of the primary industry was 3,041.6 billion yuan, up by 3.7 percent year on year; that of the secondary industry was 23,068.2 billion yuan, up by 4.3 percent; and that of the tertiary industry was 33,193.7 billion yuan, up by 6.4 percent. By quarter, the GDP grew by 4.5 percent year on year in the first quarter and 6.3 percent in the second quarter. The GDP in the second quarter was up by 0.8 percent quarter on quarter.

1. Agricultural Production was Stable and Animal Husbandry Grew Steadily.

In the first half year, the value added of agriculture (crop farming) witnessed a year-on-year increase of 3.3 percent. The summer grain had another harvest. The total output of summer grain was 146.13 million tons, 1.274 million tons less than that of the previous year, or down by 0.9 percent, still the second highest in history. In the first half year, the output of pork, beef, mutton and poultry was 46.82 million tons, up by 3.6 percent year on year. Of this total, the output of pork, beef, mutton and poultry was up by 3.2 percent, 4.5 percent, 5.1 percent and 4.3 percent respectively. The output of milk was up by 7.5 percent and that of eggs grew by 2.9 percent. At the end of the second quarter, the number of pigs registered in stock was 435.17 million, up by 1.1 percent year on year; and 375.48 million pigs were slaughtered, up by 2.6 percent in the first half year.

2. Industrial Production Recovered Gradually and Equipment Manufacturing Grew Fast.

The total value added of industrial enterprises above the designated size grew by 3.8 percent year on year in the first half year, or 0.8 percentage points faster than that in the first quarter. In terms of sectors, the value added of mining increased by 1.7 percent year on year, that of manufacturing increased by 4.2 percent, and that of production and supply of electricity, thermal power, gas and water increased by 4.1 percent. The value added of equipment manufacturing increased by 6.5 percent, 2.7 percentage points faster than that of the industrial enterprises above the designated size. An analysis by types of ownership showed that the value added of state holding enterprises was up by 4.4 percent year on year; that of share-holding enterprises was up by 4.4 percent; that of enterprises funded by foreign investors or investors from Hong Kong, Macao and Taiwan was up by 0.8 percent; and that of private enterprises was up by 1.9 percent. In terms of products, the production of solar cells, new-energy automobiles and industrial control computers and systems were up by 54.5 percent, 35.0 percent and 34.1 percent respectively. In June, the value added of industrial enterprises above the designated size grew by 4.4 percent year on year, or up by 0.68 percent month on month. In June, the Manufacturing Purchasing Managers’ Index stood at 49.0 percent, and the Production and Operation Expectation Index was 53.4 percent.

3. Service Sector Grew Fast and Services Involving Contacts and Gatherings Improved Significantly.

In the first half year, the value added of services went up by 6.4 percent year on year, 1.0 percentage point faster than that in the first quarter. Specifically, the value added of accommodation and catering, information transmission, software and information technology services, leasing and business services, financial intermediation, and wholesale and retail grew by 15.5 percent, 12.9 percent, 10.1 percent, 7.3 percent and 6.6 percent respectively. In June, the Index of Services Production increased by 6.8 percent year on year. Specifically, the Index of Services Production of accommodation and catering, information transmission, software and information technology services and leasing and business services went up by 20.0 percent, 15.4 percent and 9.3 percent respectively. In the first five months, the business revenue of service enterprises above the designated size grew by 8.5 percent year on year. In June, the Business Activity Index for Services stood at 52.8 percent, and the Business Activity Expectation Index was 60.3 percent. Among which, the Business Activity Index for industries like air transportation, express mail services, telecommunication, broadcast, television and satellite transmission services, monetary and financial services, and insurance were within the high expansion range of 60.0 percent and above.

4. Market Sales Registered Good Momentum of Growth and Sales of Upgraded Goods Accelerated.

In the first half year, the total retail sales of consumer goods reached 22,758.8 billion yuan, up by 8.2 percent year on year, 2.4 percentage points faster than that of the first quarter. Analyzed by different areas, the retail sales of consumer goods in urban areas reached 19,753.2 billion yuan, up by 8.1 percent year on year, and that in rural areas were 3,005.6 billion yuan, up by 8.4 percent. Grouped by consumption patterns, the retail sales of goods were 20,325.9 billion yuan, up by 6.8 percent; the income of catering was 2,432.9 billion yuan, up by 21.4 percent. Goods for basic living enjoyed stable growth, with the retail sales of clothes, shoes, hats, and textiles and of grain, oil and food by enterprises above the designated size up by 12.8 percent and 4.8 percent respectively. The sales of upgraded goods grew fast. The retail sales of gold, silver and jewelry, of sports and recreation goods, and of cosmetics by enterprises above the designated size went up by 17.5 percent, 10.5 percent and 8.6 percent respectively. The online retail sales reached 7,162.1 billion yuan, up by 13.1 percent year on year. Specifically, the online retail sales of physical goods were 6,062.3 billion yuan, up by 10.8 percent, accounting for 26.6 percent of the total retail sales of consumer goods. In June, the total retail sales of consumer goods went up by 3.1 percent year on year, or up by 0.23 percent month on month.

5. Investment in Fixed Assets Continued to Increase and Investment in High-tech Industries Grew Fast.

In the first half year, the investment in fixed assets (excluding rural households) reached 24,311.3 billion yuan, up by 3.8 percent year on year. Specifically, the investment in infrastructure grew by 7.2 percent; that in manufacturing grew by 6.0 percent; and that in real estate development dropped by 7.9 percent. The floor space of commercial buildings sold reached 595.15 million square meters, down by 5.3 percent; and the total sales of commercial buildings were 6,309.2 billion yuan, up by 1.1 percent. By industry, the investment in the primary industry went up by 0.1 percent, that in the secondary industry up by 8.9 percent, and that in the tertiary industry up by 1.6 percent. The private investment dropped by 0.2 percent. The investment in high-tech industries grew by 12.5 percent, of which the investment in high-tech manufacturing and high-tech services grew by 11.8 percent and 13.9 percent respectively. In terms of high-tech manufacturing, the investment in manufacturing of medical equipment, measuring instrument and meter and manufacturing of electronic and communication equipment grew by 16.8 percent and 14.2 percent respectively. In terms of high-tech services, the investment in professional technical services and in services for transformation of scientific and technological achievements grew by 51.6 percent and 46.3 percent respectively. In June, the investment in fixed assets (excluding rural households) grew by 0.39 percent month on month.

6. Imports and Exports of Goods Maintained Growth and Trade Structure Continued to Optimize.

In the first half year, the total value of imports and exports of goods was 20,101.6 billion yuan, an increase of 2.1 percent year on year. The total value of exports was 11,458.8 billion yuan, up by 3.7 percent. The total value of imports was 8,642.9 billion yuan, down by 0.1 percent. The trade balance was 2,815.9 billion yuan in surplus. The imports and exports of general trade increased by 4.0 percent, accounting for 65.5 percent of the total value of the imports and exports, 1.2 percentage points higher than that of the same period of the previous year. The imports and exports by private enterprises grew by 8.9 percent, accounting for 52.7 percent of the total value of imports and exports, 3.3 percentage points higher than that of the same period of the previous year. The imports and exports with countries along the Belt and Road grew by 9.8 percent. In June, the total value of imports and exports was 3,488.3 billion yuan, down by 6.0 percent year on year. The total value of exports was 1,989.8 billion yuan, down by 8.3 percent; that of imports was 1,498.5 billion yuan, down by 2.6 percent.

7. Consumer Price Rose Year on Year and Producer Prices for Industrial Products Dropped Year on Year.

In the first half year, the consumer price index (CPI) rose by 0.7 percent year on year. Grouped by commodity categories, prices for food, tobacco and alcohol went up by 2.1 percent; clothing up by 0.8 percent; housing down by 0.2 percent; articles and services for daily use up by 0.5 percent; transportation and communication down by 2.3 percent; education, culture and recreation up by 1.7 percent; medical services and health care up by 1.0 percent; and other articles and services up by 2.9 percent. In terms of food, tobacco and alcohol prices, the price for fresh fruit went up by 7.9 percent, pork up by 3.2 percent, grain up by 1.6 percent and fresh vegetable down by 2.7 percent. The core CPI excluding the price of food and energy grew by 0.7 percent year on year. In June, the consumer price index maintained the same level year on year and down by 0.2 percent month on month.

In the first half year, the producer prices for industrial products went down by 3.1 percent year on year. Specifically, the prices in June dropped by 5.4 percent year on year, or down by 0.8 percent month on month. In the first half year, the purchasing prices for industrial producers went down by 3.0 percent year on year. Specifically in June, the prices dropped by 6.5 percent year on year, or down by 1.1 percent month on month.

8. Employment was Generally Stable and Surveyed Unemployment Rate in Urban Areas Declined.

In the first half year, the urban surveyed unemployment rate averaged 5.3 percent, down by 0.2 percentage points over that of the first quarter. In June, the surveyed unemployment rate in urban areas was 5.2 percent, the same as that of the previous month. The surveyed unemployment rate of population with local household registration was 5.1 percent and that of population with non-local household registration was 5.3 percent, of which, the rate of population with non-local agricultural household registration stood at 4.9 percent. Specifically, the surveyed unemployment rates of population aged from 16 to 24 and from 25 to 59 were 21.3 percent and 4.1 percent respectively. Among the population aged from 25 to 59, the surveyed unemployment rates of the population with junior secondary school education or below, with senior secondary school education, with junior college education, and with university education or above were 4.4 percent, 4.4 percent, 3.9 percent and 3.2 percent respectively. The urban surveyed unemployment rate in 31 major cities was 5.5 percent, the same as that of the previous month. The employees of enterprises worked 48.7 hours per week on average. By the end of the second quarter, the number of rural migrant workers totaled 187.05 million, up by 3.2 percent year on year.

9. Residents Income Increased Steadily and Income Growth of Rural Residents was Faster than that of Urban Residents.

In the first half year, the nationwide per capita disposable income of residents was 19,672 yuan, a nominal growth of 6.5 percent year on year, 1.4 percentage points faster than that of the first quarter; the real growth was 5.8 percent after deducting price factors, 2.0 percentage points faster. In terms of permanent residence, the per capita disposable income of urban households was 26,357 yuan, a nominal growth of 5.4 percent year on year and a real growth of 4.7 percent; the per capita disposable income of rural households was 10,551 yuan, a nominal growth of 7.8 percent year on year and a real growth of 7.2 percent. In terms of income sources, the nationwide per capita salary income, net business income, net property income and net income from transfers grew by 6.8 percent, 7.0 percent, 4.7 percent and 6.1 percent in nominal terms respectively. The median of the nationwide per capita disposable income of residents was 16,393 yuan with a nominal growth of 5.4 percent year on year.

Generally speaking, in the first half year, as the economic and social development has fully returned to normal and macro policies have manifested effects, the national economy showed a good momentum of recovery with high-quality development advancing steadily. However, we must be aware that the international political and economic circumstance is intricate and complicated, and the foundation for sustained economy recovery at home is not solid yet. At the next stage, we must follow the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, adhere to the general principle of pursuing progress while maintaining stability, fully and faithfully apply the new development philosophy on all fronts, focus on the top task of high-quality development and strategic task of creating a new pattern of development, deepen reform and opening up comprehensively, accelerate the modernization of the industrial system, promote smooth economic flow, and make more efforts to change growth model, improve economic structure and gather new growth momentum, so as to achieve effective enhancement of quality and reasonable growth of quantity of economy.

Source: National Bureau of Statistics of China
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