In the first half of 2021, facing the complicated and changeable environment at home and abroad, China continued to consolidate Covid-19 pandemic prevention and control, and accurately implemented the macro policy. China's economy steadily recovered, and production demand continued to rebound. New drivers of growth were growing fast; quality and performance of economy were steadily improving; market players' expectations were on the right track; and major macro indicators were within an appropriate range.
In the first half of this year, China's Gross Domestic Product (GDP) reached 53.2 trillion yuan, up by 12.7 per cent year-on-year when calculated at comparable prices. The highlights of the economic development are as follows:
The overall employment situation remained stable. The employment-first policy has continued to gain momentum, and the surveyed urban unemployment rate has dropped. The surveyed urban unemployment rate was 5 per cent in May, down 0.1 percentage points from the previous month. Among them, the unemployment rate of most employed population aged 25 to 29 was 4.4 per cent, down 0.2 percentage points from the previous month.
Consumer prices rose modestly. Consumer prices rose 0.5 per cent in the January-June period after rising 1.1 per cent in June, with food prices down 1.7 per cent and non-food prices up 1.7 per cent.
Market vitality increased steadily. The business environment has improved, tax and fee cuts have been effective, and corporate profits and expectations have continued to improve. From January to June, 6.24 million new tax-related market entities were established nationwide, up 27.3 per cent year on year and an average growth of 10.8 per cent in two years.
Emerging growth drivers continued to grow. Progress has been made in implementing the innovation-driven strategy, and the development of high-tech industries has shown positive trends. In May, the value-added of the high-tech manufacturing industry above designated size increased by an average of 13.1 per cent over the past two years, significantly faster than the overall industrial growth rate. From January to May, the investment in high-tech industry increased by an average of 13.2 per cent over the past two years, which was also significantly faster than the total investment growth.
Foreign trade and foreign investment increased substantially. In the first six months of this year, China's imports and exports totalled US$ 2.79 trillion, up 37.4 per cent year on year. The scale of foreign trade reached a new high. New forms and models of foreign trade have developed rapidly. E-commerce of cross-border has grown nearly tenfold in the past five years, promoting the transformation and upgrading of foreign trade. From January to May, the actual use of foreign investment in China reached 481 billion yuan, up 35.4 per cent year on year and 30.3 per cent year on year compared with 2019.
The index of real quantity increased rapidly. From January to June, power generation increased by 16.2 per cent year-on-year and 15.3 per cent compared with the same period in 2019. Railway shipments totalled 1.845 billion tons, up 8.9 per cent year on year.
Comprehensive financing costs have been kept stable and decreased. From January to May, the interest rate of corporate loans was 4.64 per cent down 0.18 percentage points year on year. In May, the weighted average interest rate of newly issued Pratt & Hui loans to small and micro businesses was 4.93 per cent, down 0.15 percentage points from December last year.
In order to ensure the steady, sound and balanced development of China's economy, China promoted the following relevant key works in the first half of this year:
(1) Continue to innovate and improve macro regulation. To maintain policy continuity, stability and sustainability, facing market entities, China continued to formulate and implement macro policies. China put employment first and introduced fiscal and financial policies to support employment, continued to implement the direct mechanism of fiscal and monetary policies, and adopted financial measures and monetary policies to reduce costs for medium-sized, small and micro enterprises.
(2) Continue to promote the development of market entities. China deepened the reform to delegate powers and regulations and provide services, and stimulated the vitality of market entities and social creativity. The number of market entities was significantly expanded to 144 million. The concerned regulations have been formulated to provide legal guarantee for cultivating and expanding market entities and promoting fair competition. China continued to improve international business environment based on market and law. China's business environment jumped from 91st place in 2012 to 31st place in 2020 among 190 global economies.
(3) Continue to cut taxes and fees. China continued to implement structural tax cuts, increase the percentage of R&D expenses for manufacturing enterprises to 100 per cent, accelerate industrial transformation and upgrading, and reduce the tax burden on small, micro and individual businesses. The government funds were leveraged mainly to cut taxes and fees. In the first five months of this year, additional taxes and fees were cut by 224.2 billion yuan nationwide. Through "releasing water to raise fish", more tax sources were conserved and increased, and the situation of "more water and more fish" was presented.
(4) Continue to foster and expand new drivers of growth. With extensive using of big data, cloud computing, and the Internet of Things, exercising inclusive and prudent regulation of new technologies and forms of business, mass entrepreneurship and innovation were promoted. Relying on the internet, express delivery services, home-based office work, online education, and telemedicine were developed. The leading role of pilot free trade zones and other kinds of zones were promoted further.
(5) Continue to ensure and improve basic living standards. The guarantees of compulsory education, basic medical care and basic houses were strengthened. The level of compulsory education including rural compulsory education were developed and balanced. The reform of centralized procurement of drugs was further promoted. The development of government-subsidized rental houses were accelerated. People could get medical services more conveniently. The flexible employment, unemployment benefits were supported and their basic rights and interests were protected. The level of such protection were gradually raised.
Looking ahead, with the China's more effective response to Covid-19 and macroeconomic control, China's business environment will continue to improve, the innovation capacity and economic vitality of China's market entities will be further enhanced, and the positive trend of China's economy will be further sustained and consolidated. We are fully confident that the China's economic development in the second half of this year will be better.
Mr Liu Zhenhua is Economic & Commercial Counsellor, Embassy of the People's Republic of China in Bangladesh