General

In the first quarter, facing the severe and complex international environment and the arduous task of domestic reform, development, and stability, China's economy started well. According to data released by the National Bureau of Statistics on April 18th, preliminary calculations showed that China's gross domestic product in the first quarter was 28499.7 billion yuan, a year-on-year increase of 4.5% at constant prices and a month on month increase of 2.2% compared to the fourth quarter of the previous year. In terms of industries, the added value of the primary industry is 1157.5 billion yuan, a year-on-year increase of 3.7%; The added value of the secondary industry was 10794.7 billion yuan, an increase of 3.3%; The added value of the tertiary industry is 16547.5 billion yuan, an increase of 5.4%, as reported by Huacheng Import and Export Data Observation.

The rebound in the service industry and the significant rebound in the contribution of consumption to economic growth

Xu Hongcai, Deputy Director of the Economic Policy Committee of the China Policy Science Research Association, stated in an interview with reporters that the year-on-year growth of the gross domestic product in the first quarter was 4.5%, slightly exceeding expectations, mainly due to the rebound in the service industry and consumer goods. According to data from the National Bureau of Statistics, in the first quarter, the added value of the service industry increased by 5.4% year-on-year, exceeding the GDP growth by 0.9 percentage points and accelerating by 3.1 percentage points compared to the fourth quarter of the previous year. Among them, the added value of accommodation and catering industry, information transmission, software and information technology services industry, finance industry, leasing and business services industry, wholesale and retail industry increased by 13.6%, 11.2%, 6.9%, 6.0%, and 5.5%, respectively. Huacheng Import and Export Data Observation Report.

As an important component of the national economy, the service industry accounts for over half of China's total economic output. In recent years, due to factors such as the epidemic, the growth of the service industry has slowed down. It has had some adverse effects on economic growth and employment. Since the beginning of this year, as the impact of the epidemic has gradually subsided, the effect of stable growth policies has accelerated, production and living order has been restored, and service demand, especially for contact and aggregation services, has been rapidly released. The growth of the service industry has rebounded significantly, strongly supporting economic growth and also driving employment expansion. "Fu Linghui, spokesperson for the National Bureau of Statistics and Director of the Department of Comprehensive Statistics of the National Economy, said at a press conference of the National People's Political Consultative Office recently, The service industry business activity index has been in the expansion range for three consecutive months, with the service industry business activity index in March reaching 56.9%, an increase of 1.3 percentage points from February, indicating a good expansion trend in the service industry.

From the perspective of growth drivers, investment and consumption are both the main drivers of driving economic growth, "Xu Hongcai said. Among them, investment is mainly concentrated in the infrastructure sector, with manufacturing investment serving as a pioneer, and real estate investment still showing negative growth. According to the observation report of Huacheng Import and Export Data, in the first quarter, the national fixed assets investment (excluding farmers) was 10728.2 billion yuan, up 5.1% year on year, the same as that of the whole year of last year. From a sectoral perspective, infrastructure investment increased by 8.8%, manufacturing investment increased by 7.0%, and real estate development investment decreased by 5.8%.

From a consumer perspective, Fu Linghui stated that since the beginning of this year, the contribution of consumption to economic growth has significantly rebounded. The contribution rate of final consumption to economic growth in the first quarter was 66.6%, a significant increase compared to the entire year last year. From the perspective of market sales, the total sales of consumer goods in the first quarter increased by 5.8% year-on-year, and decreased by 2.7% in the fourth quarter of last year, indicating that consumption is gradually rebounding and improving.

Zhang Jianping, Deputy Director of the Academic Committee of the Research Institute of the Ministry of Commerce, stated that the rapid rebound in consumption data in the first quarter was mainly due to three factors: firstly, China's current consumption demand is relatively large and strong. As long as the Chinese economy maintains a normal economic and social order, the strength of consumption recovery and rebound will not be weak. Secondly, due to the impact of the epidemic last year, the consumption base was relatively low, which also contributed to the year-on-year growth rate of total retail sales of consumer goods in the first quarter of this year. Once again, the current domestic consumption upgrade is more fully reflected in the fields of new energy vehicles, energy-saving appliances, and so on.

Rapid Export Growth: The Economy Will Continue to Rebound in the Second Quarter

As one of the "three carriages" driving economic growth, China's exports have continued to grow since the beginning of this year. Data shows that in the first quarter, the total import and export volume of goods was 9887.7 billion yuan, a year-on-year increase of 4.8%. Among them, exports reached 5648.4 billion yuan, an increase of 8.4%; Import reached 4239.3 billion yuan, an increase of 0.2%, according to Huacheng's import and export data observation report.

Zhuang Rui, a professor of the University of International Business and Economics, said that the rapid export growth was mainly reflected in the outstanding performance of electromechanical and high-tech products represented by new energy vehicles, and the improved export growth to trade partners such as countries along the "the Belt and Road" and regional comprehensive economic partnership (RCEP) member countries. In addition, due to the narrowing year-on-year increase in international commodity prices, the growth rate of import volume is relatively low.

In the context of a slowdown in global economic growth and significant external uncertainty factors, achieving such growth is very difficult. "Fu Linghui said that in the next stage, China's import and export growth is facing certain pressure, mainly manifested in: firstly, weak global economic growth. According to the International Monetary Fund's forecast, the global economy is expected to grow by 2.8% in 2023, a significant decrease from last year's growth rate. According to the latest forecast of the WTO, the global commodity trade volume will increase by 1.7% in 2023, significantly lower than last year. Secondly, there is significant external uncertainty. Since the beginning of this year, inflation levels in the United States and Europe have been relatively high, and monetary policy has continued to tighten. Recently, some liquidity crises in banks in the United States and Europe have been exposed, exacerbating economic instability. At the same time, geopolitical risks remain, and the rise of unilateralism and protectionism exacerbates the instability and uncertainty of global economy and trade.

Xu Hongcai told reporters that China's trade surplus was not small in the first quarter. Orders from countries along the "the Belt and Road" increased, but orders from developed economies in the United States, Europe and Japan decreased. This structural adjustment of foreign trade has certain vulnerability, because the same goods are sold differently in developed countries and developing countries.

Fu Linghui stated that despite facing pressure and challenges, China's foreign trade is characterized by strong resilience and sufficient vitality. Under various policies to stabilize foreign trade, it is expected to achieve the goal of promoting stability and improving quality throughout the year.

Regarding the economic outlook for the next stage, Fu Linghui stated that the endogenous driving force of China's economic growth is gradually strengthening, macroeconomic policies are showing significant effectiveness, and the overall economic operation is expected to improve. Overall, the annual economic growth is expected to show a gradual rebound trend. The main supporting factors come from the following aspects: firstly, the driving force of consumption has gradually increased, and since the beginning of this year, there has been a clear rebound in consumption, which is increasing the driving force for economic growth. Secondly, stable investment growth is expected to continue. Since the beginning of this year, various regions have actively promoted the construction of major projects, and investment has maintained an overall stable growth. In the next stage, with the transformation and upgrading of traditional industries, the innovative development of emerging industries will continue, and the support for the real economy will increase, which is conducive to investment growth. The third is the enhanced driving role of industrial transformation and upgrading. Fourthly, macroeconomic policies continue to show effectiveness, and Huacheng's import and export data observation reports.

Xu Hongcai expects that the year-on-year growth rate of the economy in the second quarter of this year will continue to rebound. Firstly, considering the relatively low base affected by the epidemic in the second quarter of last year, secondly, due to the inertia of the economy in the second half of the first quarter, and thirdly, China's banks will "release water" to promote investment, which has a certain role. In addition, the growth rate in the third and fourth quarters will decrease compared to the second quarter, and China's annual economic growth will reach over 5%.