China’s economy showed moderate but steady growth in the first half year

by Flora

In the first half year of 2016， faced with complicated domestic and external conditions and mounting downward economic pressure， under the leadership of the Central Party Committee and the State Council， all regions and departments have fully implemented the five concepts of innovative， coordinated， green， open and shared development， accelerated the supply-side structural reform and encouraged mass entrepreneurship and innovation while appropriately expanding the aggregate demand. The national economy has achieved moderate and steady development.

According to the preliminary estimation， the gross domestic product （GDP） of China was 34，063.7 billion yuan in the first half year of 2016， a year-on-year increase of 6.7 percent at comparable prices. Specifically， the year-on-year growth of the first quarter was 6.7 percent and 6.7 percent for the second quarter. The value added of the primary industry was 2，209.7 billion yuan， up by 3.1 percent； the secondary industry 13，425.0 billion yuan， up by 6.1 percent； and the tertiary industry 18，429.0 billion yuan， up by 7.5 percent. The GDP of the second quarter of 2016 went up by 1.8 percent on a quarter-onquarter base.

Agricultural production was generally stable with a slight decrease in summer grain output.

The total summer grain output in 2016 was 139.26 million tons， a decrease of 1.62 million tons， down by 1.2 percent. The output of summer grain was the second high in history， slightly lower than the year 2015 which enjoyed the record high. The output of pork， beef， mutton and poultry was 38.53 million tons， a year-on-year decrease of 1.3 percent， among which the output of pork was 24.73 million tons， down by 3.9 percent. There were 402.03 million pigs registered， a year-on-year decrease of 3.7 percent and 319.59 million pigs slaughtered， a year-on-year decrease of 4.4 percent.

Industrial production grew steadily with rising profit for enterprises.

In the first half year， the total value added of the industrial enterprises above the designated size was up by 6.0 percent at comparable prices， 0.2 percentage point faster than the first quarter. An analysis by types of ownership showed that the value added of the state holding enterprises went down by 0.2 percent year-on-year； collective enterprises up by 2.6 percent； share-holding enterprises up by 7.2 percent； and enterprises funded by foreign investors or investors from Hong Kong， Macao and Taiwan up by 3.2 percent. In terms of sectors， the value added of the mining grew by 0.1 percent on a year-on-year base， the manufacturing by 6.9 percent and the production and supply of electricity， thermal power， gas and water by 2.6 percent. The industrial structure continued to be improved. In the first half year， the value added of hightech industry and equipment manufacturing industry grew by 10.2 percent and 8.1 percent year-on-year respectively， 4.2 percentage points and 2.1 percentage points higher than that of the industrial enterprises above the designated size as a whole， accounting for 12.1 percent and 32.6 percent of the value added of the industrial enterprises above the designated size， an increase of 0.7 percentage point and 1.2 percentage points compared with the same period last year. In June， the total value added of the industrial enterprises above the designated size was up by 6.2 percent year-on-year， or 0.47 percent month-on-month. In the first half year， the sales-output ratio of the industrial enterprises above the designated size reached 97.3 percent. The export delivery value of these enterprises reached 5，511.7 billion yuan， down by 0.7 percent.

In the first five months of this year， the profits made by industrial enterprises above the designated size stood at 2，381.6 billion yuan， up by 6.4 percent year-onyear （the same period last year witnessed a drop of 0.8 percent）. The costs for perhundred-yuan turnover of primary activities of the industrial enterprises above the designated size reached 85.73 yuan and the profit rate of the primary activities was 5.59 percent.

The growth of investment in fixed assets slowed down and the floor space of commercial buildings for sale decreased.

In the first half year， the investment in fixed assets （excluding rural households） was 25，836.0 billion yuan， a nominal year-on-year growth of 9.0 percent （a real growth of 11.0 percent after deducting price factors）， 1.7 percentage points slower than the first quarter. Specifically， the investment by the state holding enterprises reached 9，108.9 billion yuan， a rise of 23.5 percent； private investment reached 15，879.7 billion yuan， up by 2.8 percent， accounting for 61.5 percent of the total investment. The investment in the primary industry was 746.0 billion yuan， up by 21.1 percent year-on-year； the secondary industry 10，170.2 billion yuan， up by 4.4 percent； and the tertiary industry 14，919.8 billion yuan， an increase of 11.7 percent. Specifically， the investment in infrastructure （excluding the production and supply of electricity， thermal power， gas and water） was 4，908.5 billion yuan， an increase of 20.9 percent. The funds in place for investment in the first half year were 28，244.3 billion yuan， up by 8.0 percent. Specifically， the state budget was up by 21.8 percent， domestic loans up by 12.4 percent， self-raising funds up by 1.4 percent， foreign investment down by 7.2 percent. The total investment in newlystarted projects in the first six months was 24，020.2 billion yuan， an increase of 25.1 percent year-on-year. In June， investment in fixed assets （excluding rural households） grew by 0.45 percent monthon-month.

The total investment in real estate development in the first six months was 4，663.1 billion yuan， a nominal year-onyear growth of 6.1 percent （a real growth of 8.0 percent after deducting price factors）， 0.1 percentage point slower than the first quarter. In particular， the investment in residential buildings went up by 5.6 percent. The floor space started in the first six months was 775.37 million square meters， up by 14.9 percent. Specifically， the floor space of residential buildings newly started went up by 14.0 percent. The floor space of commercial buildings sold was 643.02 million square meters， up by 27.9 percent. The floor space of residential buildings sold was up by 28.6 percent. The total sales of commercial buildings were 4，868.2 billion yuan， a year-one-year growth of 42.1 percent. Specifically， the sales of residential buildings were up by 44.4 percent. The land space purchased for real estate development was 95.02 million square meters， down by 3.0 percent year-on-year. By the end of June， the floor space of commercial buildings for sale was 714.16 million square meters， 21.00 million square meters less than the end of March and 7.53 million square meters less than the end of May. The funds in place for real estate development enterprises in the first half year reached 6，813.5 billion yuan， up by 15.6 percent year-on-year.

Market sales increased steadily and online retailing grew fast.

In the first half year， the total retail sales of consumer goods reached 15，613.8 billion yuan， a nominal year-on- year rise of 10.3 percent （a real growth of 9.7 percent after deducting price factors）， growing at the same speed as the first quarter. Specifically， the retail sales of the enterprises above the designated size stood at 7，107.5 billion yuan， up by 7.5 percent. Analyzed by different areas， the retail sales in urban areas reached 13，424.9 billion yuan， up by 10.2 percent， and the retail sales in rural areas stood at 2，188.9 billion yuan， up by 11.0 percent. Grouped by consumption patterns， the income of catering industry was 1，668.3 billion yuan， up by 11.2 percent； and the retail sales of goods were 13，945.5 billion yuan， up by 10.2 percent. In particular， the retail sales of the enterprises above the designated size reached 6，685.7 billion yuan， an increase of 7.6 percent. In June， the total retail sales of consumer goods rose by 10.6 percent year-on-year（a real growth of 10.3 percent after deducting price factors）， a growth of 0.92 percent month-on-month.

In the first half year， the online retail sales reached 2，236.7 billion yuan， a yearon-year growth of 28.2 percent， among which the online retail sales of physical goods were 1，814.3 billion yuan， an increase of 26.6 percent， accounting for 11.6 percent of the total retail sales.

The drop in the total value of imports and exports narrowed and the proportion of general trade increased.

The total value of imports and exports in the first half year of 2016 was 11，133.5 billion yuan， a decrease of 3.3 percent year-on-year， 3.6 percentage points slower than the first quarter. The total value of exports was 6，402.7 billion yuan， down by 2.1 percent； 3.6 percentage points slower； the total value of imports was 4，730.7 billion yuan， a decrease of 4.7 percent， 3.7 percentage points slower. The trade balance was 1，672.0 billion yuan in surplus. In June， the total value of imports and exports was 2，037.8 billion yuan， a year-on-year decrease of 0.3 percent. Of this total， the value of exports was 1，174.5 billion yuan， up by 1.3 percent； and that of imports was 863.3 billion yuan， down by 2.3 percent. The trade structure was improved. In the first half year， the import and export of general trade accounted for 56.4 percent of the total value of the imports and exports， an increase of 1.2 percentage points compared with the same period last year. Specifically， the export of general trade accounted for 55.7 percent of the total value of exports， an increase of 1.3 percentage points； the export of mechanical and electronic products， 57.2 percent， being the major exported goods； export of private enterprises， 46.6 percent， an increase of 3.6 percent， continuing to rank the first in terms of business entities. The export to some the countries along the “Belt and Road” increased. In the first half year， the export to Pakistan， Russia， Bangladesh， India and Egypt increased by 22.5 percent， 16.6 percent， 9.0 percent， 7.8 percent and 4.7 percent respectively. The import of certain bulk commodities continued to grow. In the first half year， China imported 494 million tons of iron ore， an increase of 9.1 percent； 187 million tons of crude oil， an increase of 14.2 percent； 108 million tons of coal， an increase of 8.2 percent； 2.74 million tons of copper， an increase of 22 percent.

The consumer price rose mildly and the decrease of industrial product price slowed down yearon-year.

In the first six months， the consumer price went up by 2.1 percent year-onyear， growing at the same speed as the first quarter. Specifically， the price went up by 2.1 percent in the urban areas and 2.1 percent in the rural areas. Grouped by commodity categories， prices for food， tobacco and alcohol were up by 5.0 percent year-on-year； clothing up by 1.6 percent； housing up by 1.4 percent； articles and services for daily use up by 0.5 percent； transportation and communication down by 2.1 percent； education， culture and recreation up by 1.3 percent； health care up by 3.2 percent； other articles and services up by 1.4 percent. In terms of food， tobacco and alcohol prices， prices for grain went up by 0.6 percent， pork up by 28.2 percent， fresh vegetables up by 18.2 percent. In June， the consumer prices were up by 1.9 percent year-on-year and down by 0.1 percent month-on-month. In the first half year， the producer prices for industrial products went down by 3.9 percent year on year， 0.9 percentage point slower than the first quarter； the prices in June dropped by 2.6 percent year-on-year and 0.2 percent month-on-month. In the first half year， the purchasing price for industrial producers was down by 4.8 percent year-on-year. In June， the price was down by 3.4 percent year-on-year and up by 0.2 percent month-on-month.

Residents income grew steadily and rural migrant workersincome continued to grow.

In the first half year of 2016， the na- tional per capita disposable income was 11，886 yuan， a nominal growth of 8.7 percent year-on-year or a real increase of 6.5 percent after deducting price factors. In terms of permanent residence， the per capita disposable income of the urban residents was 16，957 yuan， a nominal growth of 8.0 percent， or a real growth of 5.8 percent after deducting price factors. The per capita disposable income of the rural residents was 6，050 yuan， up by 8.9 percent nominally， or 6.7 percent in real terms. The per capita income of the urban residents was 2.80 times of that of the rural residents， 0.03 less than the same period last year. The median of the national per capita disposable income was 10，505 yuan， a nominal increase of 8.3 percent. By the end of the second quarter， the number of rural migrant workers was 175.09 million， which was 730，000 more than the same period last year， or up by 0.4 percent. The monthly income of migrant workers was 3，202 yuan， a year-on-year increase of 6.7 percent.

The economic structure continued to be optimized and the supply-front structural reform achieved progress.

The industrial structure continued to be optimized. In the first half year， the value added of the tertiary industry accounted for 54.1 percent of GDP， 1.8 percentage points higher than the same period last year， 14.7 percentage points higher than that of the secondary industry. The demand structure was further improved. In the first half year， the final consumption expenditures contribution to GDP accounted for 73.4 percent， 13.2 percentage points higher than the same period last year. The late development advantage of the central and western areas continued to play a role. In the first half year， the value-added of the industrial enterprises above the designated size in the central and western areas increased by 7.3 percent and 7.2 percent year-on-year， 0.9 percentage point and 0.8 percentage point faster than the eastern area respectively； the fixed asset investment （excluding rural household） in the central and western areas increased by 12.8 percent and 13.5 percent， 1.8 percentage points and 2.5 percentage points faster than the eastern area respectively. Energy conservation and consumption reduction continued to make new achievements. In the first half year， the energy consumption per unit of GDP decreased by 5.2 percent year-onyear.

The efforts of cutting overcapacity， reducing inventory， deleveraging， lowering costs and strengthening weak links have achieved notable results. In the first half year， the output of coal and crude steel decreased by 9.7 percent and 1.1 percent year-on-year. The inventories of industrial enterprises and commercial buildings showed positive changes. By the end of May， the inventories of finished products of industrial enterprises above the designated size decreased by 1.1 percent year-on-year. From March to June， the floor space of commercial buildings for sale decreased for four consecutive months. The asset-liability ratio and the cost of industrial enterprises both decreased. By the end of May， the asset-liability ratio of the industrial enterprises above the designated size was 56.8 percent， 0.5 percentage point lower than the same period last year. For the first five months， the cost for per-hundred-yuan turnover of primary activities of the industrial enterprises above the designated size was 0.22 yuan less compared with the same period last year. The investment in weak areas grew rapidly. In the first half year， the investment in the management of water conservancy， environment and public facilities and information transmission， software and information technology grew by 26.7 percent and 22.5 percent year-on-year， 17.7 percentage points and 13.5 percentage points faster than the total investment.

Generally speaking， with the reform and innovation deepening and the macro economic policy taking effect， the national economy has achieved moderate but steady and sound development， which has laid down a solid foundation for achieving the annual economic development target. However， we must be aware that the domestic and external conditions are still complicated and severe and the downward economic pressure remains. For the next step， we must firmly implement the decisions and arrangements of Central Party Committee and the State Council， strengthen our confidence， be proactive and adhere to the general working guideline of making progress while maintaining stability. While appropriately expanding the aggregate demand， we must unswervingly advance the supply-side structural reform， foster new economic structure and reinforce new driving force for development to promote the sustainable and healthy development of the national economy.