China News Service, Beijing, March 18 (Reporter Wang Enbo) China's latest economic report card for the first two months of this year shows that industry, service industry, consumption, investment and other indicators go hand in hand and pick up simultaneously. The official said that this year's economy "started steadily."
Behind this, three expected improvements deserve attention.
One is the expectations of enterprises, especially the expectations of private enterprises.
From January to February this year, China's private fixed asset investment increased by 0.4% year-on-year, and fell by 0.4% for the whole of 2023; it accounted for 52.6% of all investment, an increase of 2.2 percentage points from the whole of 2023.
Not only did the overall growth rate turn from negative to positive, private investment in the manufacturing, accommodation and catering industries, and transportation industries also achieved double-digit growth.
Whether the private economy is active or not is related to the overall economic vitality.
Wen Bin, chief economist of China Minsheng Bank, said that since the release of the "31 Private Economy Measures" last year, China has successively introduced a series of measures to promote the development of the private economy, optimizing the development environment and strengthening factor support to promote the private economy's "development". Make it bigger, better and stronger”, forming a strong support for private investment.
Recently, news has spread that China is accelerating the legislative process of the Private Economy Promotion Law.
While confidence still needs to be further boosted, analysts generally believe that this move will help continue to improve the expectations of private enterprises.
The second is individual expectations, reflected in the continued recovery of consumption.
Only when people are confident about the development prospects are they willing to open their wallets and spend money.
Since the beginning of this year, sales in the Chinese market have continued to recover, and service consumption has been even more booming.
Under the "blessing" of the holiday economy, in the first two months, China's service retail sales increased by 12.3% year-on-year, and catering revenue increased by 12.5% year-on-year. Retail sales of automobiles, household appliances, and audio-visual equipment with obvious consumption upgrade characteristics also increased compared with the same period last year.
Wen Bin also cited a number of data to confirm the boost in Chinese residents' willingness to consume: the consumer confidence index rebounded to 88.9% at the end of January, the highest level since April 2023; at the end of February, household deposit balances increased by 12.1% year-on-year, and loan balances increased year-on-year. 5.6%, and the gap between the two narrowed to 6.5 percentage points, lower than 7.0 percentage points at the end of last year.
Zhou Maohua, a macro researcher at the Financial Markets Department of Everbright Bank, believes that China’s active policies to promote employment and income growth will help residents’ energy consumption and willingness to continue to recover.
In addition, the consumption demand for new energy vehicles remains strong, the trade-in of consumer goods and the return of household savings to normal will also help the recovery of consumption.
The third is policy expectations. A consensus has been formed on a positive policy orientation.
The Chinese economy still has to deal with challenges. Without stable expectations for strong policies, it will be difficult to gather positive and enterprising synergy.
To this end, officials have repeatedly emphasized that more policies are needed to stabilize expectations, growth, and employment, and that contractionary restraint measures are cautiously introduced.
China's economy got off to a stable start in the first two months of this year, which was inseparable from the previous policy combination of lowering reserve requirements and interest rates, cutting taxes and fees, and increasing the issuance of government bonds.
This year, China will also launch incremental measures such as ultra-long-term special treasury bonds, large-scale equipment updates, and trade-in of consumer goods, which will help improve policy expectations and promote continued economic improvement.
Pang Ming, chief economist of Jones Lang LaSalle Greater China, predicts that the next phase of policies will continue to focus on strengthening, improving quality and increasing efficiency of proactive fiscal policies, supplemented by prudent monetary policies, and implementing flexible, appropriate, precise and effective measures. Optimize and adjust credit investment direction and credit structure, and rationally allocate credit resources.
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