Chongqing- According to data released by the National Bureau of Statistics of China, the gross domestic product (GDP) of China was RMB 206.54 trillion in the first quarter of 2020, with a year-on-year decrease of 6.8 percent at comparable prices, according to the preliminary estimates.
It is expected that GDP will rebound beyond expectations in the second quarter. Concerning the new uncertainties brought by the spread of overseas epidemics, the economy is still facing multiple pressures. The fiscal policy will be the focus of the next step, through tax cuts, fee reductions, and expanded expenditures of related departments to support enterprises to overcome difficulties. Meanwhile, it will issue consumption coupons or present price subsidies to expand consumption.
In the first quarter, major economic indicators, such as consumption, investment, and industrial production, all declined.
Industrial production: In the first quarter, the added value of industries above the national scale fell by 8.4% year-on-year. Among them, the added value of the industrial enterprises above designated size in March decreased by 1.1% year-on-year, which was narrowed by 12.4 percentage points from January to February.
Marketing: In the first quarter, the total retail sales of social consumer goods was RMB 785.8 billion, dropped 19% year-on-year. Among them, the total retail sales of consumer goods in March was RMB 264.5 billion, a decrease of 15.8%, which was narrowed by 4.7 percentage points from January to February.
Investment activities: In the first quarter, the national fixed asset investment (excluding farmers) was RMB 841.4 billion, down by 16.1%, and 8.4 percentage points narrowed the decrease from January to February. In terms of different fields, infrastructure investment fell by 19.7%, manufacturing investment by 25.2%, and real estate development investment by 7.7%, which were narrowed by 10.6, 6.3, and 8.6 percentage points respectively from January to February.
The import and export of the commodity: In the first quarter, the total import and export of goods were RMB 657.42 billion, down by 6.4%.
Service industry: In the first quarter, the added value of the tertiary industry declined, compared with a year earlier. In March, the service industry production index of China fell by 9.1%, which was narrowed by 3.9 percentage points from January to February.
The resumption of work and production in the manufacturing industry achieved stage effects. Xu Kemin, director of the Industrial Policy and Regulation Department of the Ministry of Industry and Information Technology of the People’s Republic of China, said that the average operating rate of industrial enterprises above the designated size in China had reached 99%, and the price of reinstatement of personnel had reached 94 %.
The consumer market in China has further recovered. According to data from the Ministry of Commerce of the People’s Republic of China, in early April, the average daily sales of key monitoring retail enterprises increased by 3.1% compared with that in late March.
Recently, according to Ning Jizhe, the director of the National Bureau of Statistics of China, there are more than 400 million people belong to China’s middle-income group, which has the world’s most growing consumer market. This is an important advantage for China to respond to internal and external risk challenges. Meanwhile, with the issuance of a series of measures to promote consumption replenishment, later policy measures will be strengthened, which is conducive to continued rapid growth in consumption.
The market prices of means of production stopped falling and rebounded. According to the Ministry of Commerce of the People’s Republic of China, the market price of means of production rose by 0.2% last week (April 6 to 12) compared with the previous week.
Infrastructure investment accelerated.
The Huatai Securities’s report shows that intermediary construction steel trading volume turned positive year-on-year after entering April, reflecting that infrastructure investment is accelerating.
“Looking forward to the second quarter, the Chinese economy continues to face multiple pressures due to the risk of backflushing of the epidemic. However, it is expected that the GDP will recover to a positive growth rate of about 3% in the second quarter.” Said Chen Weidong, president of the Bank of China Research Institute. He also indicated that special measures should be taken during special periods, therefore, introducing macro-policy as the highlight to give priority to stable employment, assistance to small and medium-sized enterprises, and protection of people’s livelihood.
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