According to the latest data from the National Bureau of Statistics, the economy in April has continued to recover and improve since March. The main indicators have shown positive changes, and China ’s economic operation has gradually recovered to normality. However, the current overseas epidemic situation is still spreading and the domestic economic recovery is still facing many challenges. Among them, the recovery of the demand side still lags behind the production side.
It is reported that in the next step, China will continue to deepen counter-cyclical adjustments, help enterprises with greater efforts to bail out, firmly implement the strategy of expanding domestic demand, smooth the industrial cycle, market cycle, and economic cycle as soon as possible, and promote economic development to return to normal. Experts pointed out that increasing domestic demand is still the highlight, and it is expected that more policies will be released in the near future, further boosting demand, and accelerating the domestic economic recovery.
Economic operation gradually recovers towards normalization
In April, the national economy continued to improve, and both supply and demand continued to pick up. The data shows that from the production side, industrial production has shifted from decreasing to increasing. In April, the added value of industrial enterprises above designated size in the country increased by 3.9% year-on-year, and decreased by 1.1% in March. From January to April, the added value of industrial enterprises above designated size fell by 4.9% year-on-year, which was 3.5 percentage points less than that from January to March.
From the demand side, investment activities are picking up. From January to April, national fixed asset investment (excluding farm households) was 136.824 billion yuan, a year-on-year decrease of 10.3%, and the decline was narrowed by 5.8 percentage points from January to March. Market sales also showed an improvement trend. The total retail sales of consumer goods in April was 2,871.8 billion yuan, a year-on-year decrease of 7.5%, and the decrease was 8.3 percentage points narrower than that of March.
Ding Yong, chief statistician of the Investment Department of the National Bureau of Statistics, pointed out that a series of stable investment policies have come into effect, new investment projects have been started and construction efforts have been further accelerated, and the trend of narrowing investment declines has further emerged. Statistician Zhang Min from the Department of Foreign Trade and Economic Cooperation of the National Bureau of Statistics said that the process of resuming business and resuming business accelerated in April, and the residents ’order of life was restored steadily and orderly, especially driven by a number of consumer-promoting policies. The momentum is good and the market activity has increased.
In terms of external demand, the total volume of imports and exports in April was 2,496.6 billion yuan, a year-on-year decrease of 0.7%, and the decrease was 0.1 percentage points narrower than that of March. Among them, exports were 1407.4 billion yuan, an increase of 8.2%, and a decrease of 3.5% in March.
"Overall, the main economic indicators have improved in April, and China's economic operation is gradually recovering towards normalization." Liu Aihua, director of the National Bureau of Comprehensive Statistics of the National Bureau of Statistics and spokesman for the press, said.
The trend of transformation and upgrading is also continuing. Liu Aihua introduced that the new formats and models related to the Internet continue to grow against the trend. From January to April, the online retail sales of physical goods increased by 8.6% year-on-year, an increase of 2.7 percentage points from January to March; the online retail sales of physical goods accounted for 24.1%, an increase of 5.5 percentage points from the same period last year. The value added of high-tech manufacturing in April increased by 10.5% year-on-year, 1.6 percentage points faster than last month.
Reverse cycle adjustment plus code to effectively expand domestic demand
It cannot be ignored that although the national economic operation continued to improve in April, some indicators were still in the falling range from January to April. Experts said that continuing to deepen counter-cyclical adjustment, greater efforts to help companies bail out, and firmly implement the strategy of expanding domestic demand, etc., is still an important direction for the next step of economic work.
From January to April, the added value of industries above designated size fell by 4.9%, the service industry production index fell by 9.9%, fixed asset investment fell by 10.3%, the total retail sales of consumer goods fell by 16.2%, and imports and exports fell by 4.9%. "From the perspective of these accumulative speeds, the overall situation is still in the downward range, indicating that the overall economy has not returned to the normal level of previous years." Liu Aihua pointed out that it is necessary to maintain bottom line thinking and enhance risk awareness. On the one hand, we must pay close attention to the implementation of the macro hedging policy that has been issued, and on the other hand, we must adjust the response policy in a timely manner according to the changes in the situation and the demands of enterprises, and promote the economy to return to normal.
Liu Aihua also said that the economy continued to recover and improve in March and April, which also reflected the resilience of economic growth, which added more confidence to further increase macro hedging policies and further promote the resumption of production. In the next step, we will continue to deepen counter-cyclical adjustments, do a good job of the "six stability", fully implement the "six guarantees" task, accelerate the release of the potential of domestic demand, and make greater efforts to help companies bail out and smooth the industrial cycle, market cycle, and economic cycle.
It is worth mentioning that many experts emphasized that in the case of relatively large uncertainties in external demand, it is necessary to adhere to the strategy of expanding domestic demand and better play the basic role of consumption and the key role of investment.
"The current domestic economic production end is clearly ahead of the demand end. In the future, under the increasing pressure of external demand, the subsequent industrial production continues to rebound, and it is necessary to focus on expanding domestic demand and driving aggregate demand." Wang Qing, chief macro analyst of Oriental Jincheng, said.
Regarding the effective expansion of domestic demand, Liu Aihua said that in terms of consumption, one is to continue to promote online consumption to maintain growth, and the other is to actively promote offline consumption to make up for as soon as possible. In terms of investment, the next step is to focus on the weaknesses exposed by the epidemic, increase the construction of public health governance capabilities, increase the level of the industrial chain, and enhance the foundation of industrial development, "put more effort and increase efforts on these."
In the view of Wen Bin, chief researcher of China Minsheng Bank, the next stage of macro-policy should make greater efforts to promote demand recovery. Fiscal policy should increase efforts to stimulate economic potential, increase the deficit rate, issue anti-epidemic special treasury bonds, and increase the size of local government special bonds. It is expected that issues such as the issue amount, issue method, and specific investment direction will be deployed in the near future. Monetary policy will support the real economy with greater intensity, continue to implement standards reduction and other policies in due course, unblock monetary policy transmission channels, and reduce financing costs.
"In addition, the policy should work together to support manufacturing, infrastructure, private enterprises, small and micro enterprises, and other fields, effectively protect employment, basic people's livelihood, and market players, effectively expand domestic demand, and stabilize the economic fundamentals." Wen Bin said.
The joint policy will promote the economic recovery and speed up
Looking ahead to the next economic trend, the industry generally expects that industrial production will continue to return to normal, infrastructure investment will further accelerate, and consumption will continue to be gradually compensated. With the introduction of more powerful policies, the domestic economy will accelerate recovery.
Tang Jianwei, chief researcher of the Bank of Communications Finance Research Center, believes that with the increase in the resumption rate and operating rate of enterprises, it is expected that the growth rate of industrial added value will maintain a slight upward trend in the next two months. In addition, in terms of investment, the expansion of the scale of special bond issuance is expected to drive the future recovery of infrastructure investment. "New infrastructure" will become an important part of driving investment, and consumption growth is expected to continue to rebound.
Some leading indicators are showing good momentum. For example, from the perspective of electricity consumption, industrial electricity consumption has turned positive in April. From the latest monitoring results in early May, the increase in electricity consumption continued to pick up slightly. From January to April, the total investment of newly-started projects in the investment plan changed from negative to positive, from a decrease of 22% last month to an increase of 1.1%. The investment in project reserves and capital guarantees have all improved.
Wang Han, chief economist of Industrial Securities, said that under the normalization of epidemic prevention and control, domestic economic activities have gradually recovered. With the gradual resumption of work overseas, concerns about external demand in the early stage have also eased. Considering that the corresponding bail-out policy will still be implemented, the overall economic trend is improving.
Wang Qing expects that more policies will be released in the near future. The counter-cyclical hedging against consumption and investment is expected to be further increased. Fiscal, monetary, social security, and employment policies will work together to promote the recovery of the domestic economy.
"Under the influence of various policies and the joint efforts of market players, we have the conditions, the foundation, the confidence and the confidence to achieve sustained economic recovery and improvement." Liu Aihua said.
