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June 25th, 2023

On June 15th, the State Council Information Office held a press conference on the operation of the national economy in May. Fu Linghui, the spokesperson for the National Bureau of Statistics and director of the Comprehensive Statistics Department of the National Economy, stated that in May, the national economy continued to recover, the policies of stable growth, employment, and prices continued to work, demand for production steadily recovered, and overall employment and prices remained stable. The transition and upgrade of the economy continued to advance, and the economic recovery trend continued.

Fu Linghui pointed out that in May, the service industry grew rapidly, and contact-type and gathering-type services continued to improve. Industrial production maintained steady growth, with equipment manufacturing growing faster. Market sales continued to recover, with upgraded product sales growing rapidly. Fixed asset investment scale expanded, and investment in high-tech industries grew faster. The volume of goods imported and exported maintained growth, and the trading structure continued to optimize. Overall, in May, the national economy continued to recover, and the transition and upgrade of the economy continued to advance.

Fu Linghui analyzed that the economic operations in May mainly had the following characteristics:

01 Production Supply Continued to Increase

The service industry showed fast growth. As economic and social activities returned to normal, the continuous release of service needs drove service industry growth. In May, the production index of the service industry increased by 11.7% year-on-year, maintaining fast growth. With the effect of the May holiday and the low base effect of the previous year, the contact-based service industry grew faster. In May, the production index of the accommodation and catering industry increased by 39.5% year-on-year. Industrial production steadily recovered. In May, the value-added of industries above the designated size increased by 3.5% year-on-year and excluding the impact of the high base number of the same period last year, the two-year average growth rate increased from the previous month. From a month-to-month perspective, the value-added of industries above the designated size increased by 0.63% month-on-month in May, reversing the decrease from the previous month.

02 Consumption and Investment Gradually Recovered

Market sales showed steady growth. As the consumer scene expands and more people go shopping, market sales continue to expand, and service-oriented consumption grows rapidly. In May, the total retail sales of consumer goods increased by 12.7% year-on-year, with catering income up 35.1%. Investment continues to expand. From January to May, fixed-asset investment increased by 4% year-on-year, with infrastructure investment and manufacturing investment growing by 7.5% and 6% respectively, maintaining fast growth.

03 The Resilience of Foreign Trade Continues to Show

The international environment is complex and severe, and the world economy overall is growing weak. Facing the difficult situation of shrinking external demand, China actively opens up trade with countries along the Belt and Road, stabilizes the foreign trade market of traditional trade partners, and promotes foreign trade improvement, stabilization, and upgrading, with continuous effects. In May, the total import and export volume increased by 0.5% year-on-year, in sharp contrast to the decline in foreign trade in some emerging economies. From January to May, the total import and export volume of China’s foreign trade with countries along the Belt and Road increased by 13.2% year-on-year, maintaining fast growth.

04 Overall Employment and Consumer Prices Remained Stable

The national urban survey unemployment rate remained unchanged from the previous month. Economic operations have improved, job recruitment demand has increased, labor participation has increased, and the employment situation has remained stable overall. In May, the national urban survey unemployment rate was 5.2%, the same as the previous month. The consumer price index rose slightly, and consumer demand steadily recovered. With the continuous increase of market supply, the supply and demand relationship remain stable, and consumer prices remain generally stable. In May, the consumer price index increased by 0.2% year-on-year, with the increase expanding by 0.1 percentage points compared to the previous month. Core CPI, excluding food and energy, increased by 0.6%, maintaining overall stability.

05 High-quality Development is Advancing Steadily

New impetus continues to develop. The leading role of innovation is continuously enhanced, and new industries and new formats are developing rapidly. From January to May, the value added for equipment manufacturing industries above a designated scale grew by 6.8% year on year, faster than the growth of industries above a designated scale. The online retail sales of physical goods grew by 11.8%, maintaining relatively fast growth. Consumption and investment structures continued to optimize, while product supply and capacity at a high-level accelerated formation. From January to May, the retail sales of upgraded products, such as gold, silver, jewelry, and sports and entertainment supplies for units above the designated size, grew by 19.5% and 11%, respectively. The growth rate of investment in high-tech industries was 12.8% year on year, significantly faster than the overall investment growth rate. The green transformation continued to deepen, and the low-carbon green production and lifestyle accelerated formation, leading to a rapid increase in the production of related products. From January to May, the production of new energy vehicles and charging piles increased by 37% and 57.7%, respectively, contributing to environmental improvement and eventually forming new economic growth points.

Fu Linghui also pointed out that the current international environment remains complex and severe, with weak global economic growth, although the domestic economy is recovering positively, market demand remains insufficient, and some structural issues are prominent. For continued high-quality development, the next stage needs to adhere to the guiding principles that seek progress while ensuring stability, and fully implementing the new development concept in an integral, accurate, and comprehensive manner. Accelerating the construction of a new development pattern, fully deepening reform and opening, focusing on recovering and expanding demands, accelerating the construction of a modern industrial system, promoting overall improvement in the economy, and promoting the effective development of quality and rational growth.

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