The Chinese economy continues its upward trend thanks to its growth promotion policies

* In May, the most important event was a faster increase in consumption, which was driven by factors such as the May Day holiday, trade policy in consumer goods and the earlier start of online sales promotions.

* Industrial production has grown at a rapid pace since the beginning of the year amid the country’s efforts to accelerate industrial transformation and modernization.

* The real estate market is still in the adjustment phase.

　　* International organizations and institutions have raised their forecasts for China’s economic growth.

BEIJING, June 17 (Xinhua) — China’s economy maintained its growth trend in May, as evidenced by faster consumption growth and steady growth in industrial production, the latest government data showed.

Important economic indicators rebounded during the month amid government actions to support economic growth and promote high-quality development, National Bureau of Statistics (NBS) spokesman Liu Aihua said at a news conference in Beijing on Monday.

According to Liu, a rebound in consumption, supported by the May Day holiday, along with better export and import data as well as the services industry, helped revive the economy during the month. “Driven by factors such as macroeconomic policy effects, improved external demand and the May Day holiday, the service industry, consumption and imports and exports rebounded in May.”

Tourists buy ice pops on Central Street in Harbin, northeastern China’s Heilongjiang province, May 3, 2024. (Xinhua/Wang Jianwei)

Despite the complex and serious external environment and effective domestic demand still insufficient, Liu told the press that China’s economy has maintained an “overall stable trend.”

FASTER CONSUMPTION GROWTH

The most important event of the last month was the faster growth in consumption. In May, retail sales of consumer goods rose 3.7 percent year-on-year to 3.92 trillion yuan (about 551 billion U.S. dollars). On a monthly basis, retail sales of consumer goods increased by 0.51 percent compared to the previous month.

“Due to the May Day holiday, the effective policy of replacing old consumer goods with new ones and the earlier start of online sales promotions on June 18, the annual growth dynamics of retail sales of consumer goods in May were 1.4 percentage points higher compared to the previous month.” Liu said.

Consumption of services increased due to high travel during the holiday season, which boosted demand for cultural and tourism services, Liu said.

Passengers board a train at Nanjing Railway Station in Nanjing, the capital of east China’s Jiangsu Province, May 5, 2024. (Photo: Liu Jianhua/Xinhua)

Greater consumption also resulted in an increase in retail sales of product categories such as sports and recreational products, cosmetics, communication equipment and household appliances and audiovisual equipment, which increased by 20.2%, 18.7% and 16.6%, respectively. and 12.9 percent

Transactions for new electric passenger vehicles in China also recorded a strong performance last month, rising 38.4 percent year-on-year, Liu said, citing data from the China Automobile Dealers Association.

Overall, the services industry saw growth last month, with the sub-indices for information transmission services/software/information technology, leasing and business services, transportation/warehousing/postal services, and wholesale and retail trade all reporting faster-year growth on an annual basis in May.

Meanwhile, online retail sales rose 12.4 percent year-on-year in the January-May period, data showed.

INDUSTRIAL PRODUCTION IS DEVELOPING

In May, value-added industrial production increased by 5.6 percent year-on-year, or 0.3 percent month-on-month.

In particular, value-added industrial production in the manufacturing sector increased by 6 percent, and high-tech production increased by 10 percent year-on-year. “3D printing equipment, new energy vehicles and integrated circuits increased by 36.3 percent, 33.6 percent and 17.3 percent respectively,” said Liu, who also revealed that the profits of industrial enterprises reached more than 2.09 trillion yuan in January-April period, up 4.3 percent year-on-year.

Robots install car windshields at Chinese automaker SAIC-GM-Wuling’s smart workshop in Liuzhou, southern China’s Guangxi Zhuang Autonomous Region, May 9, 2024. (Xinhua/Jin Haoyuan)

Industrial production has been growing at a rapid pace since the beginning of the year amid the country’s efforts to accelerate industrial transformation and modernization, Liu said. “In the future, there are many favorable factors for the rapid growth of industrial production. These include greater production expectations from businesses and improved industrial profits.”

Moreover, the gradual implementation of policies such as large-scale equipment modernization will add new impetus to industrial production, Liu said.

From a foreign trade perspective, China’s imports and exports of goods rose 8.6 percent year-on-year in May, 0.6 percentage points faster than the previous month, data showed.

CHALLENGING

Monday’s NBS data showed that the country’s real estate market remains a drag on the economy.

Investment in fixed assets in the country increased by 4 percent year-on-year in the first five months of this year. Liu said that if real estate investment was subtracted, domestic fixed asset investment would increase by 8.6% during this period.

The area of ​​new houses decreased by 20.3% year-on-year in the first five months, and the sales value also decreased by 27.9%.

Liu said the real estate market is still in the re-regulation phase.

In mid-May, Chinese authorities unveiled a series of tailored measures in the face of a cooling in the sector, including lowering payment rates, eliminating interest rate floors on first- and second-home commercial mortgages, and establishing a re-lending facility to support local state-owned enterprises in taking advantage of these funds to purchase commercial homes in exchange for affordable housing.

“Policies and measures take time to have an impact on the market,” Liu said, adding that the government will seek to implement policies and measures already implemented and explore new approaches to replenish home inventories and stabilize the market.

A job seeker attends a job fair dedicated to people with disabilities in Beijing, the capital of China, May 27, 2024. (Xinhua/Li Xin)

The data also shows that in May the unemployment rate in cities was 5 percent, unchanged compared to the previous month and by 0.2 points. percent less than in May 2023

However, Liu explained that China still faces employment challenges, both due to the large number of jobs the country will need to create for job seekers and structural problems in the labor market.

ECONOMIC DEFENSE WILL MAINTAIN

“In the future, driven by the development of new qualitative production forces according to local conditions, we expect that new industries, new business formats and new business models will generate more and more new enterprises and new jobs,” Liu said.

The World Bank recently raised its forecast for China’s economic growth in 2024 to 4.8%, up 0.3 percentage points from its previous forecast. The International Monetary Fund also revised China’s economic outlook to 5 percent, 0.4 percentage points higher than the previous forecast, Liu said.

“International organizations and institutions have raised their economic growth forecasts for China, which fully demonstrates confidence in China’s economic growth prospects,” Liu said.

Based on analyzes of production, consumption and government policy support, the economy is expected to continue to rebound and improve, she added.

(Video reporters: Ding Ting, Zhang Mengjie,Yuan Min; video editors: Zhang Nan, Yin Le, Shi Peng, Zheng Xin, Zhang Qiru)■