In H1,National Economy Witnessed the Steady and Sound Consolidated Growth Momentum

In the first half of the year， faced with a complicated and changing environment both at home and abroad， Chinas economy sustained a steady recovery with production and demand picking up， employment and prices remaining stable， new driving forces thriving fast， quality and efficiency being enhanced， market expectations improving and major macro indicators staying within a reasonable range. The national economy witnessed a steady and sound consolidated growth momentum.

According to preliminary estimates， the gross domestic product （GDP） of China in the first half of the year was RMB 53，216.7 billion， a year-on-year increase of 12.7% at comparable prices， and 5.6 percentage points lower than that of the first quarter； and the average two-year growth was 5.3%， which was 0.3 percentage points faster than that of the first quarter. By quarter， the year-on-year GDP growth for the first quarter was 18.3%， with an average two-year growth of 5.0%； for the second quarter it was 7.9%， with an average two-year growth of 5.5%. By industry， in the first half of the year， the value added of primary industries was RMB 2，840.2 billion， a year-on-year growth of 7.8%， with an average two-year growth of 4.3%； secondary industries were RMB 20，715.4 billion， a year-on-year growth of 14.8%， with an average two-year growth of 6.1%； and tertiary industries were RMB 29，661.1 billion， a year-on-year growth of 11.8%， with an average two-year growth of 4.9%. The quarter-on-quarter GDP growth of the second quarter was 1.3%.

1. Industrial production grew steadily and high-tech manufacturing grew fast

In the first half of the year， the total value added of the industrial enterprises above the designated size grew by 15.9% year-on-year， with an average two-year growth of 7.0%， which was 0.2 percentage points faster than that of the first quarter； specifically， that of the second quarter went up by 8.9% year-on-year. In June， the total value added of the industrial enterprises above the designated size grew by 8.3% year-on-year， with an average two-year growth of 6.5%； and the monthon-month growth was 0.56%. In terms of sectors， in the first half of the year， the value added of mining went up by 6.2% year-on-year， with an average two-year growth of 2.5%； that of manufacturing was up by 17.1%， with an average two-year growth of 7.5%； and that of production and the supply of electricity， thermal power， gas and water was up by 13.4%， with an average two-year growth of 6.0%. The value added of high-tech manufacturing went up by 22.6% year-on-year， with an average two-year growth of 13.2%. In terms of products， the production of new-energy automobiles， industrial robots and integrated circuits increased by 205.0%， 69.8%， and 48.1% year-on-year respectively， with the average two-year growths all exceeding 30%. An analysis by types of ownership showed that the value added of state holding enterprises went up by 11.9% year-on-year； that of share-holding enterprises was up by 15.8% year-on-year； that of enterprises funded by foreign investors or investors from Hong Kong， Macao， and Taiwan was up by 17.0% year-on-year； and that of private enterprises was up by 18.3% year-onyear. In June， the Manufacturing Purchasing Managers Index of China was 50.9%， staying above the threshold for sixteen months in a row. The Production and Operation Expectation Index was 57.9%.

In the first five months of the year， the total profits made by industrial enterprises above the designated size was RMB 3，424.7 billion， up by 83.4% yearon-year， with an average two-year growth of 21.7%. The profit rate of the business revenue of industrial enterprises above the designated size was 7.11%， which was 2.05 percentage points higher than that of the first five months in 2020.

2. Service sector recovered steadily with market expectations picking up

The first half of the year witnessed the steady recovery of tertiary industries. Specifically， the value added of tertiary industries for the second quarter increased by 8.3% year-on-year， with an average two-year growth of 5.1%； that for the first quarter increased by 15.6% year-on-year， with an average two-year growth of 4.7%. Specifically， in the first half of the year， the value added of transportation， storage and postal services and information transmission， software and information technology services increased by 21.0% and 20.3% year-on-year respectively， with the average two-year growths increasing by 6.9% and 17.3% respectively. In June， the Index of Services Production increased by 10.9% year-on-year， with an average two-year growth of 6.5%. In the first five months， the business revenue of service enterprises above the designated size went up by 31.9% year-on-year， with an average two-year growth of 11.1%， which was 0.2 percentage points higher than that of the first four months of the year.

In June， the Business Activity Index for services was 52.3%， staying above the threshold for sixteen months in a row. Specifically， the Business Activity Index for sectors closely related to online consumption， such as express mail services， telecommunication， broadcasting， television and satellite transmission services， the Internet， software and information services stayed within the expansion range of 57.0% and above； monetary and financial services and insurance stood within the expansion range of 60.0% and above. In terms of the market expectation， the Business Activities Expectation Index was 60.4%， continuing to stay within the expansion range.

3. Market sales improved gradually， and sales of upgraded consumer goods witnessed accelerated growth

In the first half of the year， the total retail sales of consumer goods reached RMB 21，190.4 billion， up by 23.0% yearon-year， with an average two-year growth of 4.4%， which was 0.2 percentage points faster than that of the first quarter； specifically， that of the second quarter went up by 13.9% year-on-year with an average two-year growth of 4.6%. In June， the total retail sales of consumer goods reached RMB 3，758.6 billion， up by 12.1% yearon-year， with an average two-year growth of 4.9%， or up by 0.70% month-on-month. In the first half of the year， when analyzed by different areas， the retail sales of consumer goods in urban areas reached RMB 18，409.8 billion， up by 23.3% year-on-year with an average two-year growth of 4.4%， and the retail sales of consumer goods in rural areas stood at RMB 2，780.7 billion， up by 21.4% with an average two-year growth of 4.0%. Grouped by consumption patterns， the retail sales of goods reached RMB 19，019.2 billion， up by 20.6% yearon-year with an average two-year growth of 4.9%； the revenue from catering was RMB 2，171.2 billion， up by 48.6%， which was the same as that of the first half of 2019. When grouped by categories， the year-on-year growth rates for 18 categories of goods by enterprises above a designated size all exceeded 10%， among which， more than 70% of categories of goods witnessed their year-on-year growth rates exceed 20%. In terms of the average two-year growth， other than petroleum products， retail sales of other categories of goods all witnessed positive growth； specifically， that of nine categories including sports and recreational articles， communication equipment， cosmetics， and cultural and office supplies exceeded 10%. Online retail sales reached RMB 6，113.3 billion， a year-on-year growth of 23.2%， with an average two-year growth of 15.0%， or 1.5 percentage points faster than that of the first quarter. Specifically， the online retail sales of physical goods were RMB 5，026.3 billion， up by 18.7%， with an average twoyear growth of 16.5%， or 1.1 percentage points faster than that of the first quarter， accounting for 23.7% of the total retail sales of consumer goods， or 1.8 percentage points higher than that of the first quarter.

4. Investment in fixed assets continued to recover and the average two-year growth rate of investment in manufacturing accelerated

In the first half of the year， the investment in fixed assets （excluding rural households） reached RMB 25，590.0 billion， up by 12.6% year-on-year， and grew by 0.35% month-on-month in June. The average two-year growth reached 4.4%， 1.5 percentage points faster than that of Q1. Specifically， in the first half of the year， investment in infrastructure was up by 7.8% year-on-year， with an average two-year growth of 2.4%， showing a slight decrease compared with the first five months of the year； manufacturing was up by 19.2% yearon-year， with an average two-year growth of 2.0%， 1.4 percentage points faster than in the first five months of the year； real estate development was up by 15.0% year-on-year with an average two-year growth of 8.2%， which was a slight decrease compared with the first five months of the year. The floor space of commercial buildings sold reached 886.35 million square meters， up by 27.7% year-on-year， with an average two-year growth of 8.1%. The total sales of commercial buildings reached RMB 9，293.1 billion， up by 38.9% year-on-year， with an average two-year growth of 14.7%. Investment in primary industries went up by 21.3% yearon-year， with an average two-year growth of 13.2%； secondary industries were up by 16.3% year-on-year， with an average twoyear growth of 2.9%； and tertiary industries were up by 10.7% year-on-year， with an average two-year growth of 4.8%. Private investment was up by 15.4% year-on-year， with an average two-year growth of 3.8%. Investment in high-tech industries grew by 23.5% year-on-year， with an average twoyear growth of 14.6%， of which investment in high-tech manufacturing and high-tech services increased by 29.7% and 12.0% yearon-year respectively， and their average twoyear growths reached 17.1% and 9.5%. In terms of high-tech manufacturing， investment in the manufacturing of computers and office equipment and in the manufacturing of medical equipment， measuring instrument and equipment grew by 47.5% and 34.2% year-on-year respectively， and their average two-year growths reached 26.3% and 18.7%. In terms of high-tech services， investment in e-commerce services and research， development and design services went up by 32.9% and 28.4% year-on-year， and their average two-year growths reached 32.5% and 15.9%. Investment in social sectors went up by 16.4% year-on-year， with an average two-year growth of 10.7%， among which investment in the health sector and education went up by 35.5% and 14.2% year-on-year， with average two-year growths of 24.9% and 12.5%.

5. Consumer prices rose mildly and producer prices for industrial products remained at a high level

The consumer price index （CPI） went up by 0.5% year-on-year in the first half of the year and maintained the same year-on-year in the first quarter. In June， the consumer price index went up by 1.1% year-on-year， 0.2 percentage points slower than May， or down by 0.4% month-onmonth. In the first half of the year， the consumer price index went up by 0.6 percent in urban areas and 0.4% in rural areas. When grouped by commodity categories， prices for food， tobacco and alcohol were up by 0.4% year-on-year； clothing was the same year-on-year； housing was up by 0.2%； articles and services for daily use were up by 0.1%； transportation and communication were up by 1.9%； education， culture and recreation were up by 0.9%； medical services and health care were up by 0.3%； and other articles and services were down by 1.1%. In terms of food， tobacco and alcohol prices， the priceof pork went down by 19.3%， grain was up by 1.2%， fresh fruits were up by 2.6% and fresh vegetables were up by 3.2%. The core CPI excluding the prices of food and energy went up by 0.4%； specifically， it maintained the same year-on-year in the first quarter.

In the first half of the year， the producer prices for industrial products went up by 5.1% year-on-year， which was 3.0 percentage points faster than the first quarter. In June， it grew by 8.8% year-on-year， 0.2 percentage points slower than in May. In the first half of the year， the purchasing prices for industrial producers went up by 7.1% year-on-year， 4.3 percentage points faster than the first quarter. These went up by 13.1% year-on-year and 0.8% month-onmonth in June.