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Briefing on the State of the Chinese Economy by the Spokesperson of the Chinese Embassy in Singapore
2021-11-05 11:22

With the COVID-19 pandemic still spreading and global economic recovery yet to gain a firm foothold, the state of the Chinese economy is closely watched. The National Bureau of Statistics of China has recently released China's economic data in the first three quarters of 2021. With a view to enhancing understanding of the state of the Chinese economy, the spokesperson of the Chinese Embassy in Singapore, based on the data provided, hereby gives an overview of China's economic performance and relevant policies and measures adopted.

I. China's economy has been on a track of stable recovery this year. With a raft of measures to advance innovation, improve macro-regulation, unleash market vitality, boost drivers for development and promote opening up at a higher level, the Chinese government has successfully overcome constraints of multiple factors, including the pandemic, floods, supply chain restructuring and higher baseline numbers, further stabilizing China's economic fundamentals and maintaining the momentum of continued recovery.

First, economy grew within a reasonable range, and recovery has continued. In the first three quarters, China's GDP increased by 9.8% year on year, much higher than the target of 6% set at the beginning of this year. The job market remained generally stable, with 10.45 million new urban jobs being added, achieving 95% of the annual target. The consumer price index was kept low, up by 0.6% year on year, with consumer commodity prices stabilizing and going down. International payments continued to grow, with total volume of imports of goods up by 22.7% year on year. Trade surplus was expanding, and foreign exchange reserves maintained at above $3.2 trillion for five consecutive months. 

Second, economic structure was optimized, quality and efficiency of development were enhanced. Industrial structure continued to improve. In the first three quarters, the added value of high-tech manufacturing enterprises above a designated size increased by 20.1% year on year, and the services sector contributed 54.2% to the GDP growth, up by 1.2 percentage points over the first half of the year. Demand structure continued to improve. In the first three quarters, the final consumption contribution rate was 64.8%, up by 3.1 percentage points over the first half of the year. Green development proceeded steadily. Energy consumption per unit of GDP fell by 2.3% year on year. Overall environmental quality was improved.

Third, reform and opening-up has deepened, and new drivers of growth were bolstered. Outcomes of supply-side structural reforms have been consolidated. In Q3, the utilization rate of industrial capacity stood at 77.1%, the highest year-on-year figure in recent years. Remarkable progress was made in shoring up weaknesses. In the first three quarters, investments in education and health increased by 10.4% and 31.4% respectively year on year. Opening-up was further expanded. In the first eight months, China's foreign investment in actual use increased by 22.3% year on year. In the first three quarters, total import and export volumes between China and countries along the Belt and Road Initiative increased by 23.4% year on year. Investment in innovation continued to increase. In the first three quarters, the output of new energy vehicles and industrial robots increased by 172.5% and 57.8% respectively year on year.

Fourth, incomes of residents continued to grow, and people's livelihoods were effectively protected. In the first three quarters, the national per capita disposable income increased by 9.7% year on year, with the income of rural residents growing faster than that of urban residents. Food and other related commodities were in sufficient supply. In the first three quarters, food prices fell by 1.6% year on year. Public services continued to improve. Expenditures on education and housing increased rapidly. In the first three quarters, the national per capita transfer income increased by 7.9% year on year.

II. Recently, China has encountered some specific issues in its economic development such as tight power and coal supply and debt risk of certain real estate company. Building on its experience on regulation, the Chinese government has strengthened targeted regulation to sustain sound economic development.

First, in response to the tight power and coal supply, the Chinese government has taken such measures as prioritizing residential use, urging coal mines with potential to increase output, supporting coal-fired plants to increase electricity supply, improving the market-oriented pricing mechanism for coal-fired power, accelerating construction of wind and photovoltaic power bases and curbing development of projects with high energy consumption and heavy carbon emissions. With these measures in place, tight supply will be alleviated. In general, energy shortage is temporary, and its impact on the economy is controllable. 

Second, regarding the debt risk of some real estate company due to poor management and ill-considered diversified expansion, it is not common in the whole real estate industry. Most Chinese real estate companies are operating well with good financial indicators. The real estate industry is generally healthy. At present, relevant departments and local governments are mitigating risk in accordance with laws and regulations, and will safeguard the legitimate rights and interests of housing consumers. The debt default of certain real estate company is an individual case, and its spillover effect on the financial sector is generally controllable. 

III. This year marks the launch of China's 14th Five-Year Plan and the start of China's new journey toward fully building a modern socialist country. China is well placed to achieve its targets for socioeconomic development for the whole year. The trend of long-term economic development remains unchanged. Going forward, China will continue to implement the new development philosophy, build a new development paradigm and promote high-quality development at a new development stage to manage its own business well. At the same time, China is ready to work with the international community to promote global economic recovery. 


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