What does the GDP growth rate from negative 6.8% to positive 3.2% mean?

What does it mean to go from negative 6.8% to positive 3.2%?

　　Reporter Mao Zhenhua

　　From negative 6.8% to positive 3.2%, the second quarter GDP growth data announced at the press conference of the State Council Information Office is encouraging. The positive growth rate not only shows that my country's economic development has fought a beautiful "turnaround", it also laid a solid foundation for the continued recovery in the second half of the year and the quarterly improvement.

Strong rebound in the second quarter

　　This achievement was hard-won. So, what does 3.2% mean?

　　"As a large developing country with a population of 1.4 billion, China is able to effectively control the epidemic in a short period of time, realize the economy from falling to rising, and to maintain overall economic and social stability. This is not easy. This highlights the strong resilience and potential of China’s economy. At the same time, it also reflects the effect of the comprehensive policies of the Party Central Committee and the State Council." Liu Aihua, spokesperson of the National Bureau of Statistics and Director of the National Economic Comprehensive Statistics Department, said at a press conference on July 16.

　　Well-known economist Guan Qingyou said that the GDP growth rate in the second quarter exceeded market expectations. Previously, many institutions have judged that there is a high probability of achieving a positive growth between 2% and 3% in the second quarter.

　　Cheng Shi, chief economist and managing director of ICBC International, believes that the achievement of the dazzling "transcript" has benefited from strong measures to prevent and control the epidemic and resume work and production. The secondary industry, which was hit the most in the first quarter, rebounded strongly in the second quarter. The restoration of the growth of the secondary and tertiary industries led to a significant reduction in the income decline of Chinese residents in the first half of the year.

　　3.2% also gave people who had doubts about economic growth the hope of continuing to achieve recovery growth steadily.

　　"Judging from the recovery of various economic indicators in the first half of the year, especially in the second quarter, the sustained recovery of the economy in the second half of the year is supportive." Liu Aihua said that many indicators have shown a significant rebound or narrower decline since March. It shows that the overall impact of the epidemic is controllable, and China's economy is relatively capable of self-adjustment.

　　What is gratifying is that high-tech industries that are less affected by the epidemic have already begun to exert their strength. In May alone, the output of 3D printing equipment, smart watches, integrated circuit wafers, charging piles and other products increased by more than 70% year-on-year. During the epidemic, a number of new industries, new formats and new models were also born, and new growth points were formed in the digital economy, smart manufacturing, and life and health.

Face the difficulties and stay focused

　　Of course, the Chinese economy is closely related to the world economy. The "World Economic Outlook Report" released by the International Monetary Fund on June 24 predicts that the global economy will shrink by 4.9% in 2020, a further decrease of 1.9 percentage points from the April report, revealing not optimistic expectations.

　　At the same time, from the perspective of the entire first half of the year, the GDP growth rate still fell by 1.6% year-on-year. In the first half of the year, major indicators such as industry, service industry, consumption, and investment remained in a falling range. The loss from the impact of the epidemic has not yet been fully compensated, and hard work is needed to push the economy back to normal levels.

　　What's more serious is that there are uncertainties in the development of the epidemic situation, especially in the face of greater import pressure. Whether it is the emergence of confirmed patients who have had contact with the Beijing Xinfadi market some time ago, or the detection of the new crown virus on the outer packaging of frozen South American shrimp imported from Ecuador, these have repeatedly issued warnings: prevent the rebound of the epidemic should not be taken lightly.

　　Xu Qiyuan, a researcher at the Institute of World Economics and Politics of the Chinese Academy of Social Sciences, believes that the sustainability of the economic recovery in the second half of the year depends on three factors: one is the controllability of the domestic epidemic; the other is the extent to which the continuous spread of the epidemic impacts the global economy The third is the strength of domestic macro-control policies and whether the transmission mechanism is smooth. In his view, given the shrinking global market, the focus of future aggregate demand is still at home.

　　"I believe that as China's anti-epidemic results gradually appear, economic recovery in the third and fourth quarters will be more on track." Guan Qingyou said that China's economic growth is still on the path of recovery in the second half of the year, and GDP growth is expected to increase quarter by quarter, and the production side will be restored. Better than the demand side. On the demand side, infrastructure investment is a relatively certain growth support, and new infrastructure is highly anticipated.

　　Ren Zeping, president of the Evergrande Economic Research Institute, believes that the key to launching the “new” round of infrastructure is “new”, and it must be promoted in a reform and innovative way, rather than simply re-tracking the old path. For example, it is necessary to adjust investment areas, and on the basis of complementing traditional infrastructure such as railways and highways, vigorously develop new infrastructure such as 5G, artificial intelligence, industrial Internet, smart cities, education and medical care.

　　In short, the future will not be smooth sailing. We still need to maintain our strength, continue to work hard on the "six stability" and "six guarantees", maintain the bottom line of people's livelihood, focus on eliminating risks, and constantly innovate and make breakthroughs. (Published in "Ban Yue Tan" Issue 14 of 2020)