China's high-quality economic development gathers pace

Note: The following article is taken from the Chinese-language "Commentaries on International Affairs."

According to data released by the National Bureau of Statistics of China, the country’s economy was operating within an acceptable range in the first eight months of this year, with no change in structural optimization. The steady and positive trend continues. Over the recently ended Mid-Autumn Festival holiday, the total number of tourists engaged in domestic travel exceeded 100 million, a year-on-year increase of 7.6%, and domestic tourism revenue increased by 8.7% year-on-year. This shows that domestic demand is releasing huge potential, and that the positive factors promoting the high-quality development of China's economy have been building consistently.

[Photo: VCG]

In the first eight months, China's main economic indicators have either risen or fallen compared with the previous seven months, but the figures have remained generally stable. This is reflected in the fact that the service industry production index increased by 7.0%, and the added value of industrial enterprises above a designated size increased by 5.6%, indicating that overall production was stable; total retail sales of consumer goods increased by 8.2%, and fixed asset investment increased by 5.5%, indicating that domestic demand continued to expand. In addition, the CPI increase continues to be within the full-year target, and foreign trade and foreign investment is still growing rapidly.

As China continues the process towards high-quality development, a slowdown in the economy during adjustment is inevitable. At the same time, the continued optimization of the economic structure has become a major highlight. In the first eight months, from the perspective of industrial structure, the growth of the information technology sector, leasing and business service industries has been significantly faster than that of service industries overall. The growth rate in high-tech manufacturing industry added value was also much faster than the overall growth rate of industrial added value above a designated size, showing that the modern service industry is growing well with an obvious industrial upgrading trend. From the perspective of demand structure, online retail sales of physical goods increased by 20.8%, faster than the growth rate of total retail sales of consumer goods by 12.6 percentage points; the growth rate of high-tech manufacturing and high-tech service investment was respectively 6.5 and 9.4 percentage points faster than total investments. The proportion of general trade imports and exports as compared to total imports and exports increased by 1 percentage point year-on-year, indicating that the demand structure is continuously being optimized.

A major positive factor in China’s stable economic growth is that the level of employment continues to increase. In the first eight months, China’s urban new jobs reached 89.5% of the target set for the year. The unemployment rate in a survey of urban areas in August was 5.2%, down 0.1 percentage point from the previous month. Increased levels of employment have laid a solid foundation for the high-quality development of China's economy.

In addition, the average daily number of newly registered enterprises in China in the first eight months reached more than 19,000, and the strong entrepreneurial enthusiasm of the Chinese people has added to the country's inexhaustible development momentum. In the first eight months, China’s actual use of foreign investment increased by 6.9%, indicating that more foreign companies are willing to participate in the high-quality development of the Chinese economy and share in its opportunities.

Against the background of the current global protectionism and unilateralism and the overall slowdown in world economic growth, China's economy remained generally stable, and made progress in the first eight months of the year. It also showed great resilience and potential to the outside world. This is due to the Chinese government's adoption of a series of measures to continuously release the policy dividend. For example, China will reduce the burden of corporate tax and social security contributions by nearly 2 trillion yuan this year. The country will improve the loan market quotation rate (LPR) formation mechanism and lower the deposit reserve ratio of financial institutions so that the actual cost of social financing will be reduced. China has further reduced the negative lists for foreign investment, continuously improved and promoted laws and regulations for system-based opening-up, enacted the Foreign Investment Law, and established the Shenzhen Pioneer Demonstration Zone, the Shanghai Free Trade Zone’s Lingang New Area and six additional free trade zones. The measures have provided a good environment for investors and enhanced the vitality of major Chinese market players.

For a long time, Chinese companies have always insisted on innovation-driven growth, constantly accelerating transformation and upgrading, and providing an endogenous driving force for the national economy to achieve high-quality development. In Shenzhen, innovation has become a common consensus among enterprises. In 2018, the number of patent applications under the PCT (International Patent System) in Shenzhen reached 18,000, ranking first in the country for 15 consecutive years. In the Fortune Global 500 list of 2019, the number of Chinese companies surpassed those from the United States for the first time. Among the newly released list of China’s top 500 public companies, their combined revenues were nearly 80 trillion yuan, up 11.1% year-on-year; their total assets were valued at nearly 300 trillion yuan, up more than 9% year-on-year; their Research and Development spending was 976.548 billion yuan, an increase of 21.7% year-on-year... These figures have showed the continuous improvement of Chinese enterprises' competitiveness and strong support for the Chinese economy.

In the face of uncertainties in the world economy, China will continue to maintain the continuity and stability of macroeconomic policies in the future, overcome various risk challenges, continuously achieve high-quality development, and continue to inject stability expectations for world economic growth.