SCIO briefing on China's economy in H1
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E-mail China.org.cn, July 16, 2019
21st Century Business Herald:
There may have been some answers already, but I would still like to ask. We have seen that the growth of industrial investment, the service sector and consumption all picked up in June, but the overall economic growth rate in the second quarter went down. What is behind the rebound of the growth rates in June? Will it last? In addition, the urban unemployment rate rose slightly in June. What do you think of the current employment situation? Thank you.
Mao Shengyong:
Thank you. You just asked two questions. The first one is whether the rebound of the growth rates in some indicators in June will last and what will happen in the second half of this year. The second question is about my views on the current employment situation.
As for your first question, we saw some indicators in June indeed picked up compared with those in May, including the industrial growth, as well as the growth of the retail sales of consumer goods and the production index of the service sector. For example, the total retail sales of consumer goods increased 9.8% in June, up 1.2 percentage points from May. The two main reasons are as follows. First, car sales performed better than expected. With the national standards for pollutant discharge of motor vehicles switched from Stage V to VI, promotional efforts were stepped up in June to increase automobile sales, which is a key reason for the better performance. The sales of automobiles by companies above designated size increased over 17%, driving the total retail sales of consumer goods to increase about 1.6 percentage points. Second, online retail sales in June performed relatively good. With promotional activities on June 18, we saw the online sales of cosmetics and household appliances grow at a relatively fast speed. These two factors combined to accelerate the growth of total retail sales in June. The growth of total retail sales of consumer goods had an obvious driving effect on the growth of the production index of the whole service sector, so these two indicators are correlated. As for industrial growth, we can look at the facts that the output and the value added of most industries and products increased in different degrees in June compared with those in May, and that there was also growth in export delivery in June. Thus, the growth figures were well-founded and also related with each other on the whole.
As for the second half of this year, there will be both positive and negative factors. On one hand, there will still be downward pressure for these indicators; on the other, there will be many favorable factors to support their stable performance. For example, the government will constantly stimulate more vitality in the market, and gradually implement a series of counter-cyclical adjustments, including a policy of stabilizing employment, trade, investment, finance, foreign investment and market expectations. These policies will have a more obvious effect on the indicators in the second half of this year, and all the above will be conducive to the stable performance of these indicators in the second half of the year.
The second question is about the unemployment rate. The surveyed unemployment rate in cities and towns increased 0.1 percentage point in June compared with that in May. Overall, the employment situation was still relatively stable, with the surveyed unemployment rate staying around 5%; however, we should notice that there are still some structural problems behind the overall stability that need to be addressed. In particular, with nearly 8.3 million university students graduating this year, there is still an increasing pressure on employment. As the graduation season comes in July and August, there is still some structural pressure on employment. Some traditional industries, including those undergoing structural transformation and overcapacity reduction, may also bring structural pressure on employment. The central government has paid close attention to employment, as it is the foundation of people's livelihood. This year, we have raised the priority of the employment policy to the same level as the proactive fiscal policy and the prudent monetary policy. Moreover, priority has been given to employment as the country takes major actions to keep stability. The government has also introduced many practical measures. On one hand, the employment situation remains stable on the whole; on the other, there are some structural problems and pressures that need our attention. With a series of policies and measures to stabilize and promote employment, we are able to maintain an overall stable employment situation. Thank you.
