National Bureau of Statistics: The effect of "two priorities" construction and "two new" work on expanding domestic demand and boosting confidence has gradually emerged since the beginning of this year

On March 16, Fu Linghui, spokesperson of the National Bureau of Statistics, Chief Economist, and Director of the Department of Comprehensive Statistics on the National Economy, stated at a press conference held by the State Council Information Office that, looking ahead, domestic and international challenges are intertwined and overlapping, with many unstable and uncertain factors. However, the long-term positive fundamentals and basic trend of China’s economy remain unchanged. As new productive forces are cultivated and expanded, and the new development pattern accelerates, macro policies are increasingly effective. The national economy is expected to continue its steady and progressive development, moving towards new and better growth.

1. The economic start has been strong. In January–February, China’s production and demand remained stable and increased, with major economic indicators accelerating significantly. Positive factors are accumulating and strengthening, laying a good foundation for economic growth. During this period, the added value of industrial enterprises above designated size and the total retail sales of consumer goods grew faster than in the fourth quarter of last year by 1.3 and 1.1 percentage points respectively. Export growth of goods has accelerated noticeably, and fixed asset investment has shifted from decline to growth. Along with improvements in supply and demand indicators and market supply-demand relations, prices have shown a mild rebound. In January–February, the consumer price index (CPI) rose slightly, and the producer price index (PPI) continued to narrow its decline, all of which are beneficial for increasing income for businesses and residents.

2. Demand expansion is strongly driving growth. Upholding mutual benefit and win-win cooperation, expanding trade and economic exchanges with countries around the world, building the Belt and Road Initiative with high quality, and actively promoting digital and green trade will open new space for foreign trade development. In January–February, China’s import and export growth with ASEAN, the EU, and Belt and Road countries and regions remained around 20%. In the first year of the 14th Five-Year Plan, efforts are being increased to build new infrastructure and improve people’s livelihoods, with strengthened project, factor, and funding guarantees, which will help drive investment growth. Infrastructure investment in January–February increased by 11.4% year-on-year. The Government Work Report for this year proposes to develop plans to increase residents’ income in urban and rural areas, promote expansion and upgrading of commodity consumption, and implement actions to improve service consumption and benefit the people, all of which will enhance residents’ consumption capacity and willingness. In February, the consumer confidence index rose by 1 point from the previous month, marking two consecutive months of recovery.

3. Industrial upgrading provides strong support. Innovation-driven development is increasingly prominent, with emerging industries growing and strengthening, supporting production. In January–February, the added value of high-tech manufacturing above designated size increased by 13.1% year-on-year, and digital product manufacturing increased by 8.8%, both significantly faster than overall industrial growth. The rapid expansion of new technologies such as artificial intelligence is increasingly transforming traditional industries and promoting the development of emerging sectors. In January–February, the added value of railway, ship, aerospace, and other transportation equipment manufacturing grew by 13.7%, and electrical machinery and equipment manufacturing grew by 8.7%. The booming green industries inject new momentum into industrial upgrading. During this period, the output of wind turbines and lithium-ion batteries for energy storage increased by 28.7% and 84% respectively. The steady progress of energy green transformation has achieved remarkable results. The development of new energy sources like wind and solar power has driven the growth in energy storage demand, with related products experiencing rapid and substantial increases.

4. Macro policy support is strong. The Central Economic Work Conference and the National Two Sessions have made comprehensive arrangements for this year’s economic work. Fiscal policy is more proactive, with expenditures reaching 30 trillion yuan for the first time. Monetary policy remains moderately relaxed, maintaining reasonable and ample liquidity, and promoting low overall financing costs for society. Reforms and macro policies are coordinated to enhance momentum and stimulate vitality. From the implementation perspective, since the beginning of the year, the “dual” construction and “two new” initiatives have gradually shown effects in expanding domestic demand and boosting confidence. In January–February, investment in equipment and tools related to equipment renewal maintained rapid growth, and the growth rate of some goods related to old-for-new consumer upgrades rebounded significantly compared to last year.

(Source: The Paper)