SCIO briefing on China's economic performance in April 2020
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E-mail China.org.cn, May 18, 2020
CCTV:
Good morning, Ms. Speaker. From the data you released just now, we can see the major economic indicators continued to improve in April. Is the recovery as expected? What's your overall opinion? Thank you.
Liu Aihua:
Thank you for your question. As is seen from the key data and the circumstances I just introduced, overall, the economy in April sustained the recovery and improvement first noticed in March, with major indicators showing positive changes. The main characteristics can be summed up in the following four aspects:
First, solid progress was made in the resumption of normal work and production. According to a quick survey by the National Bureau of Statistics in late April, approximately 85% of industrial enterprises above designated size, and over 70% of service enterprises above designated size, as well as more than 60% of qualified construction enterprises, resumed more than half their normal production level. Market expectations also show a month-on-month improvement. In April, the manufacturing purchasing managers' index (PMI) stood at 50.8%, which is within the "booming" range. The non-manufacturing business activity index registered 53.2%. The construction business activity index reached 59.7% and the service business activity index was 52.1%, both a slight rebound from March. This indicates enterprises expectations have improved month-on-month to some extent.
Second, production demand gradually improved. . The total added value of industrial enterprises above designated size grew by 3.9% year-on-year, shifting from a decline of 1.1% in March to a growth trend. From a sectoral perspective, the total added value in 28 of the 41 sectors recorded year-on-year growth and this is expanding. Regarding products, the total added value of 60% of 612 goods surveyed achieved year-on-year growth, 20 percentage points higher than the previous month. As far as related indicators are concerned, the industrial consumption of electricity in April grew 1.6% year-on-year, compared with a 2.8% decline in March. The decline also narrowed in the service sector. The service production index in April went down 4.5%, narrowing by 4.6 percentage points from March. Specifically, the decline in wholesale and retail trade as well as the transportation is narrower than the overall figure for the service sector. Investment activity is recovering. In the first four months of this year, investment in fixed assets registered a year-on-year decline of 10.3%, 5.8 percentage points narrowing compared to the figure in the first quarter. Specifically, the decline of investment in manufacturing, infrastructure and real estate narrowed at a rate between 4 and 8 percentage points. Market sales are improving, too. In April, the total retail sales of consumer goods fell by 7.5%, a decline narrowing by 8.3 percentage points compared with March. Among them, sales of upgraded consumer goods grew fast, especially telecommunication appliances, up by 12.2%. The total value of exports grew more than expected - up by 8.2% year on year.
Third, transformation and upgrading have continued. In the first four months of this year, new forms and models of online business continued to emerge. Online sales of physical goods during the first four months grew by 8.6%, which is 2.7 percentage points higher than in the first quarter, accounting for 24.1% of the total retail sales of consumer goods and a year-on-year rise of 5.5 percentage points. In terms of industries, the added value from high-tech manufacturing in April grew 10.5%, which was 1.6 percentage points higher than in March. High-tech products continued to maintain robust growth, with the production of cables, excavators and shoveling machinery for example increasing by more than 40% and industrial robots rising by 26.6%.
Fourth, employment and the price of commodities remained generally steady. In April, the unemployment rate in surveyed urban areas was 6.0%, which was 0.1 percentage points higher than in March, marking a slight month on month rise. In terms of unemployment figures, the rate of unemployed amongst those surveyed aged from 25 to 59 stood at 5.5%, 0.5 percentage points below the average unemployment rate. Regarding the price of commodities, prices continued to fall steadily. In April, the price of commodities increased by 3.3% year on year, which was 1 percentage point lower than in March. Food price in April saw an increase of 14.8% year on year, down 3.5 percentage points from March. The rise in prices of major agricultural products and byproducts including pork, fruit and fresh vegetables began to fall, with the decline expanding.
From the four aspects above, we can see that the national economy in April continued the momentum of recovery and improvements from March. Meanwhile, we can also see that these indicators were improving as a compensatory recovery. In terms of the performance of major indicators in the first four months of the year, the major indicators were still in decline. In the first four months, the total added value of industrial enterprises above designated size decreased by 4.9% year on year; the index of services production (ISP) declined by 9.9%; the investment in fixed assets decreased by 10.3%; the total retail sales of consumer goods went down by 16.2%; and the total value of imports and exports decreased 4.9%. These cumulative rates showed that the overall economy continued to decline, indicating that the overall economy has not yet returned to normal levels of previous years. Now that the epidemic is spreading overseas, its huge impact on the global economy is still evolving, which poses new challenges for steady economic recovery at home. Faced with such a complex situation, we have to consider the bottom-line when dealing with difficulties. We will continue to deepen counter-cyclical adjustments and carry out solid work to achieve stability in six key areas: employment, finance, foreign trade, foreign investment, domestic investment, and market expectations. We must also fully safeguard six key areas: jobs, people's basic livelihood, market entities, food and energy security, the stability of industrial and supply chains, as well as the smooth running of communities so as to accelerate the unleashing of potential in domestic demand and promote more bailouts for enterprises as well as maintain smooth circulation in industry, markets and the economy and bring economic development back to normal in all respects. This is my summary of the overall economic performance in April. Thank you.
