On April 18, the National Bureau of Statistics released economic data for the first quarter. According to preliminary calculation, the GDP in the first quarter of this year grew by 4.5% year-on-year, which was 2.2% higher than that in the fourth quarter of last year. What about the data on services, consumption, employment and income? What to make of the economic data in the first quarter? What kind of foundation did it lay for the economy throughout the year? News 1+1 is connected to Liu Yuanchun, macroeconomist and president of Shanghai University of Finance and Economics. What can we see from the economic data in the first quarter?
Economic performance in the first quarter
On April 18, the National Bureau of Statistics released the performance of the national economy in the first quarter of 2023. In the first quarter, the value added of the service sector grew by 5.4% year on year. Total sales of consumer goods grew by 5.8% year on year, contributing 66.6% to economic growth and being the most important driver of economic growth among the three major demands. China's total import and export volume of goods was 9,887.7 billion yuan, up by 4.8% year-on-year...... What signals did the economic data of the first quarter release? Learn about ↓ together
How do you view the 4.5% year-on-year GDP growth in the first quarter of this year?
Liu Yuanchun, macroeconomist and President of Shanghai University of Finance and Economics: The GDP growth of 4.5% in the first quarter of this year is better than the market expected. It shows that the restart effect is very full. The economic recovery has been fully launched and basically achieved the goal of a "good start". What is more important is to compare this rate with the trend of global growth. The whole of Europe and the United States, including most emerging economies, have entered a downtrend. The current 4.5% growth rate achieved by the restart of the Chinese economy has indeed become the engine and stabilizer of the whole world growth.
In order to achieve GDP growth of around 5% for the whole year, what is the trend of GDP in the next three quarters?
Liu Yuanchun, macroeconomist and president of Shanghai University of Finance and Economics: GDP grew by 4.5% in the first quarter. If we want to achieve 5% growth for the whole year, it means that we can achieve the target by achieving 5.2% growth in the next three quarters. At present, it is very likely that GDP growth will exceed 5%. One important reason is that, thanks to the increase of base effect, it is possible to achieve 10% growth in the second quarter, and there is no problem in maintaining a growth rate of 5%-6% in the third and fourth quarters. Therefore, from the perspective of the whole year, we believe that the first quarter has laid a good foundation for the whole year to reach the target, as long as we maintain the current recovery situation, the whole year presents a "low, high and stable" pattern should be no problem.
The first quarter economic data, the most concerned about what? What optimism do you see?
Liu Yuanchun, macroeconomist and president of Shanghai University of Finance and Economics: The most important thing is the internal driving force, which means that the balance sheets of various economic entities should be improved. First of all, the fiscal growth rate in the first quarter, especially in March, has turned from negative to positive, which is good news for the whole policy support. Second, the growth rate of the first quarter of residential property net income reached 4.1%, compared with the fourth quarter of last year significantly improved. More important is the profits of enterprises, from the current listed companies in the first quarter of the quarterly report, most listed companies have shown significant improvement in profits. Therefore, the improvement of corporate profits, residents' income and government revenue can effectively transform the economic recovery from a simple restart effect and compensation effect to an endogenous circular effect, which is a solid foundation for our next economic recovery.
There are still some numbers to worry about. First, the growth rate of private investment in the first quarter still did not exceed 1%, indicating that the internal driving force of private enterprises has not been fully enhanced, and the expectation of future investment needs to be further consolidated. The second is real estate, although sales figures are good, but the overall source of funding is still negative growth. More importantly, more than 30% of the added value of 41 industries still has negative growth, and more than 30% of the growth rate of the whole industrial products is also negative. This shows that our economic recovery is not synchronous, and there is a strong structural differentiation.
How did fiscal revenue in the first quarter turn from negative to positive?
Liu Yuanchun, macroeconomist and President of Shanghai University of Finance and Economics: The market economy with Chinese characteristics, a very important engine is the government, especially local governments. If local governments are short of funds to support the next part of our package, then the overall economic recovery will be greatly affected. The improvement of finance, on the one hand, reflects the whole trading order and economic growth into a new stage, on the other hand, it also lays a good foundation for the next policy, policy escort, so this parameter is very important.
The CPI grew by 1.3% in the first quarter, which is not a big increase in prices. But will the economy experience deflation?
Liu Yuanchun, macroeconomist and president of Shanghai University of Finance and Economics: The 1.3% year-on-year CPI growth in the first quarter does reflect the current imbalance between supply and demand, which deserves great attention. But on the other hand, it must be made clear that a slight drop in the price level is not equivalent to deflation, because deflation is a negative increase in the price level, not a decline in the growth rate of prices. The main causes of the fall in the price level are food and energy. On the food side, an important factor is seasonal changes in pork prices; In terms of energy, it is mainly related to the base effect of last year, as well as some fluctuations caused by some changes in the whole geopolitics and geo-economy. Therefore, the current fall in the price level, there are seasonal factors, there are foreign factors. In terms of the overall supply and demand relationship in China's macro economy, the core CPI, which excludes food and energy prices, actually rose slightly in March compared with January and February. This shows that the current recovery is out of sync at both ends of the supply and demand, but the recovery is overall. So just because we have CPI growth of 1.3 per cent doesn't mean we are in deflation, it just means our recovery is out of sync. We should pay closer attention to the progress of the recovery on the demand side.
What challenges do we need to address in the face of steady economic growth?
This year, the Chinese economy still needs to move forward under heavy pressure. Economic and social development and employment are the top priority. Data from the first quarter showed that the average surveyed urban unemployment rate was 5.5 percent, down 0.1 percentage point from the fourth quarter of last year. Import and export will also face challenges in the future. From -7% in January, 8% in February, to 15.5% in March. In the first quarter, the growth rate of China's import and export accelerated rapidly, but we still face considerable pressure in the future.
The surveyed urban unemployment rate was 5.5% in the first quarter. How should we stabilize employment this year?
Liu Yuanchun, macroeconomist and president of Shanghai University of Finance and Economics: The overall employment situation is improving, but the structure is deteriorating. This situation should be a normal situation for China in the past and now. This year, the employment supply of young people has been greatly increased. In particular, the employment of college students has reached 11.58 million this year, an increase of 7.62% year-on-year. At present, we will see the strength of the economic recovery, and the recovery is mainly reflected in some state-owned enterprises and some technology-intensive and capital-intensive industries, while the recovery of labor-intensive industries is still uneven, so the current overall economic recovery and structural employment deterioration phenomenon. In the next step, targeted policies must be introduced to address the rising trend of structural unemployment, especially for the employment of college students, and special funds and programs should be established to alleviate the current situation.
In the first quarter, the added value of industrial production of foreign-invested enterprises and those invested in Hong Kong, Macao and Taiwan fell by 2.7%. What should we do next?
Liu Yuanchun, macroeconomist and President of Shanghai University of Finance and Economics: At present, anti-globalization is on the rise across the board. According to WTO statistics, global trade in the first quarter decreased by one percentage point year on year, and only grew by about 1%. In addition, the growth rate of global foreign investment has also dropped sharply, which is evident not only in Europe and the United States, but also in developing countries. At present, there has been some slowdown in foreign investment and foreign trade, which is basically in step with the global trend. For China, how to accelerate the building of a new development pattern, especially the internal cycle to attract global capital and global trade, is a key focus of our work. I think in the coming period of time, should be able to improve better, especially when the world economy continues to slow down, our economy continues to rise, this contrast brought about by the attraction of capital, to attract transactions has a very important stabilizing function.
