China’s Economy Witnessed Steady Growth Momentum in H1 2021
Ambassador Chang Hua
28 July 2021
According to the data recently released by China’s National Bureau of Statistics, China’s GDP grew 12.7% year-on-year in the first half of this year, which puts average H1 growth for the past two years at 5.3%. Steadily strengthening and improving, China’s economy continues to inject confidence to the global economic recovery. Since China’s economic development in H1 of this year has attracted worldwide attention and many Iranian media and friends are also interested in knowing more about it, I would like to make a few comments on this aspect.
Firstly, China’s sustained and steady economic recovery is attributable to the achievements of coordinated Covid-19 response and its economic and social development. Not long ago, General Secretary of the Communist Party of China (CPC) Central Committee and Chinese President Xi Jinping in his speech at a ceremony marking the centenary of the CPC stressed that we need to ground our work in this new stage of development, fully and faithfully apply the new development paradigm, foster a new pattern of development so as to promote high-quality development. Adhered to the general principle of pursuing progress while ensuring stability, all regions and sectors in China have continued to consolidate and expand the achievements made in the Covid-19 response as well as previous economic and social development, and implemented macro policies in a targeted way. As a result, China’s economy recovers steadily, with the production and demand picking up, employment and prices remaining stable, new economic drivers thriving fast, quality and efficiency of development enhancing, market expectations improving and major macro indicators staying within reasonable range. In short, China’s economy has managed to keep good momentum for steady and consolidated growth. Many international media also believe that China’s sustained economic recovery reflects its strong resilience and the global recovery still relies on the impetus provided by China.
Secondly, China’s economic growth in the first half has rich connotations and many highlights. First, the overall employment remained stable. The surveyed urban unemployment rate fell to 5% in May, showing 0.1% drop from the previous month. Second, consumer prices rose modestly by 0.5% from January to June and 1.1% within June, but food prices were down 1.7%. Third, market vitality increased steadily. From January to June, there were 6.24 million new market entities nationwide handling tax-related matters, showing an increase of 27.3%. Fourth, emerging growth drivers continued to take shape. From January to May, investment in high-tech industries increased by an average of 13.2% over the past two years, significantly faster than overall investment growth. Fifth, foreign trade and foreign investment increased substantially. From January to June, imports and exports totaled 2.79 trillion USD, up 37.4% year on year, and the scale of foreign trade reached a new high. The scale of cross-border e-commerce has increased nearly 10 times in five years. From January to May, the actual use of foreign investment in China reached 481 billion yuan, up 35.4% year on year. Sixth, real physical indexes increased rapidly. In the January-June period, electricity production increased 16.2% year on year, and the volume of railway freight transport increased 8.9% year on year. Seventh, the overall financing costs have been reduced. The corporate loan rate in January-May was 4.64%, 0.18% lower than last year.
Thirdly, steady and orderly progress in key tasks has provided strong driving forces for China’s economic development. First, we developed new ways to improve macro regulation. We have maintained the continuity, stability, and sustainability of our policies, carried out range-based, targeted, and cross-cyclical regulation, put employment first, and refrained from adopting a deluge of strong stimulus policies. Second, we have been determined to promote the development of market entities. We further carried out reforms to streamline administration and delegate power, improve regulation and upgrade services, in order to constantly stimulate the vitality of market entities and the creativity of society. With the enforcement of a variety of legislation including the Regulations of the People’s Republic of China on the Registration and Administration of Market Entities, the business environment in China has also improved, ranking 31st globally in 2020. Meanwhile, Chinese government keeps promoting Internet Plus Government Services model, aiming at simplifying enterprise-related examination and approval but strengthening in-process and post-process oversight instead. Third is to cut taxes and fees. We have continued to implement structural tax cuts, and make good use of government funds to expand tax sources. In the first five months of this year, taxes and fees nationwide were reduced by 224.2 billion yuan. Fourth is to foster and expand new drivers of growth. We have attempted to promote the extensive use of high-end technologies such as big data, cloud computing, and the Internet of Things while making sure that new technologies and new forms of businesses are subject to tolerant and prudent regulation, providing policy incentives for entrepreneurship and innovation, and letting the pilot free trade zones play the catalytic role. Fifth is to ensure and improve people’s basic livelihoods by prioritizing compulsory education, basic medical care, and basic housing. We also further support flexible employment, improve unemployment assistance and protect the basic rights and interests of freelancers.
Fourthly, the steady growth of the China’s economy has given impetus to the world economic recovery. China’s strong economy growth which stands at 18.3% in the first quarter and 7.9% in the second quarter, is reassuring for the global economic recovery under the shadow of the Covid-19 pandemic. Despite the impact of the pandemic on global industrial chains, supply chains and trade, China managed to consolidate and expand its achievements in pandemic response as well as economic and social development. China is the first to resume work and production, playing a vital role in improving the efficiency of resource allocation in the global market, alleviating worries about global supply disruptions and improving the well-being of consumers around the world. At the same time, guided by the principles of openness, cooperation, unity and win-win results, China will unswervingly expand opening-up in all respects so as to make the Chinese market a market for the world and share the opportunities in China with the world. All countries around the world, including Iran, are welcome to benefit from China’s economic development, promote high-quality Belt and Road cooperation through greater openness and cooperation in trade, investment, industry and other fields, and collectively build a community with a shared future for mankind.