On October 18, the State Council Information Office held a press conference regarding the performance of the national economy in the first three quarters of 2024. Deputy Director of the National Bureau of Statistics, Sheng Laiyun, noted that there were positive changes in the macroeconomic environment in September, signaling a stabilization and recovery trend.
During the conference, a reporter inquired: “While the overall economic performance in our country has remained stable this year, we have also encountered new problems and challenges. How do you assess the economic performance in the first three quarters, particularly in the third quarter?”
Sheng Laiyun responded by highlighting the complexity and variability of both domestic and international environments this year. He noted that the external situation has been turbulent, with increased risks and challenges. The domestic economy is currently undergoing a critical phase of structural adjustment and transformation, with cyclical and structural issues intertwined, resulting in adjustment pains. In response to the new circumstances and challenges, the Communist Party of China has taken a comprehensive approach to address these difficulties through scientific decision-making and timely macroeconomic control. Particularly, following a significant Politburo meeting in late September, a package of incremental policies was rapidly introduced, significantly boosting market confidence and vitality. Overall, the national economy maintained stability with progressive improvements, and key economic indicators showed positive changes in September, contributing to a growing accumulation of favorable factors.
Sheng Laiyun elaborated on three prominent characteristics observed in the economic data from the first three quarters:
First, despite some fluctuations in growth in the second and third quarters, the overarching trend of stability in the national economy remains unchanged. From the four major macroeconomic indicators—growth, employment, inflation, and international payments—the economy showed broad stability. In the first three quarters, the economy grew by 4.8%, including a 5.3% increase in the first quarter, 4.7% in the second, and 4.6% in the third quarter. The fluctuations in these indicators were modest and within expected targets. Employment and price levels also remained fairly stable. The urban unemployment rate stood at 5.1% for the first three quarters, consistent with the first half of the year. Although the second quarter was slightly lower at 5.0%, it rose to 5.2% in the third quarter. The Consumer Price Index (CPI), which reflects inflation levels, averaged an increase of 0.3% over the three quarters, with the first quarter unchanged, second quarter up by 0.3%, and third quarter by 0.5%. Additionally, international payments remained largely balanced, with external trade expectations exceeding predictions; exports grew by 6.2% in the first three quarters, and foreign reserves returned to $3.3 trillion. Hence, evaluations of these four macroeconomic indicators suggest the national economy was stable in the first three quarters.
Second, the trend of steady progress toward high-quality development continues. China is in a critical stage of transformation and upgrading, with the primary goal of shifting development modes to promote high-quality economic growth. Across various regions, there has been a comprehensive and accurate implementation of new development concepts, firmly pushing for high-quality development across five dimensions: innovation, coordination, green growth, opening-up, and shared development.
In terms of innovation, high-tech industry investments maintained rapid growth in the first three quarters, with value-added of high-tech manufacturing industries rising by 9.1% year-on-year, outperforming the average industrial growth rate by 3.3 percentage points. Coordination in development continues as well, with improvements in industry, demand, and regional structures. The share of manufacturing value-added among larger enterprises is on the rise, alongside increased investment in high-tech sectors.
On the front of green development, industries represented by new energy vehicles, lithium batteries, and solar power continued to see double-digit growth. Production and consumption in wind, nuclear, and solar energy sectors remain robust.
Regarding open development, regions are unwaveringly advancing high-level openness. Exports have shown resilience, achieving a 6.2% increase despite a complex international landscape, with growth rates to countries involved in the Belt and Road Initiative exceeding average levels.
For shared development, resident income growth in the first three quarters slightly outpaced GDP growth, and effective social welfare measures ensured food security and continued success in agricultural production, leading to new harvests this year. Thus, from various dimensions, China’s economy shows reasonable growth while optimizing structure and improving quality, with the upward trend in high-quality development remaining intact.
Third, there were positive changes in the national economy in September, with most indicators showing marginal improvements, reflecting a stabilizing and recovery trend. Following a series of policy implementations, particularly after the key Politburo meeting in late September which accelerated the rollout of new policies, market confidence soared, altering business expectations and invigorating market dynamics. Key indicators from September reveal these encouraging shifts.
Firstly, production in both industrial and service sectors showed marginal improvements. The industrial value-added in September increased by 5.4% year-on-year, marking a 0.9 percentage point rebound from August, ending a four-month decline. Service sector production saw a 5.1% growth, improving by 0.5 percentage points compared to August.
Secondly, in terms of demand, the total retail sales of consumer goods rose by 3.2% in September, up 1.1 percentage points from August. From January to September, fixed asset investment grew by 3.4% year-on-year, leveling off with the previous months. This stabilization is significant as it halts the previous downward trend in investment growth.
Furthermore, market expectations exhibited positive marginal improvements. The manufacturing Purchasing Manager Index (PMI) for September was 49.8%, up 0.7 percentage points from August, with the production index rising to 51.2%, up 1.4 percentage points. A survey of 100,000 large enterprises indicated a 1.3 percentage point uptick in the proportion of those optimistic about fourth-quarter performance compared to the previous month, signifying improved market sentiment.
Additionally, there was enhanced market activity in both the stock and real estate sectors. While trading volume in the Shanghai and Shenzhen stock exchanges dropped by 15.3% in August, it surged by 32.7% in September. Although real estate transactions remain in a corrective phase, both sales area and revenue are experiencing a narrowing of cumulative declines.
Sheng Laiyun concluded, “Based on these observations, we believe that September marked a significant shift in the macroeconomic environment, indicating a stabilization and recovery trend. However, we remain aware that these changes are still in the preliminary stage, and the foundation for a stronger recovery is not yet solidified. The next step involves carefully implementing central government policies, accelerating the execution of both new and existing measures, and creating a cohesive policy environment to bolster this recovery and drive the economy upward while enhancing structural improvements and overall development.”
