A Good Start for China’s National Economy in the First Quarter of 2018

National Bureau of Statistics of China

17 April 2018

Since the beginning of 2018, under the strong leadership of the Central Committee of the Communist Party of China with General Secretary Xi Jinping as the core, all regions and departments adhered to the general working guideline of making progress while maintaining stability, adopted the new development philosophy, followed the requirements for high-quality development, centered on the development of a modern economic system and implemented policies vigorously. As a result, the national economy maintained the momentum of steady and sound development, the transformation and upgrading was pushed forward steadily, the economic performance continued to improve and the economy was off to a good start.

According to the preliminary estimates, the gross domestic product (GDP) of China was 19,878.3 billion yuan in the first quarter of 2018, a year-on-year increase of 6.8 percent at comparable prices. The value added of the primary industry was 890.4 billion yuan, up by 3.2 percent; the secondary industry 7,745.1 billion yuan, up by 6.3 percent; and the tertiary industry 11,242.8 billion yuan, up by 7.5 percent.

1. Agricultural Production was Sound.

The output of pork, beef, mutton and poultry was 23.16 million tons, a year-on-year growth of 1.8 percent, among which the output of pork was 15.43 million tons, up by 2.1 percent. The number of pigs registered was 415.23 million, a year-on-year decrease of 1.2 percent and that of pigs slaughtered 199.83 million, a year-on-year growth of 1.9 percent. In March, the weather in major agricultural areas was generally favorable, the sunshine and soil moisture content were suitable and the spring ploughing and sowing were going on smoothly.

2. The Industrial Production was Generally Stable.

In the first quarter, the year-on-year real growth rate of total value added of the industrial enterprises above the designated size was 6.8 percent, 0.4 percentage point slower than the first two months, growing at the same speed as the same period last year. An analysis by types of ownership showed that the value added of the state holding enterprises went up by 7.9 percent year on year; collective enterprises up by 0.1 percent; share-holding enterprises up by 7.0 percent; and enterprises funded by foreign investors or investors from Hong Kong, Macao and Taiwan up by 5.5 percent. In terms of sectors, the value added of the mining grew by 0.9 percent on a year-on-year base, the manufacturing grew by 7.0 percent and the production and supply of electricity, thermal power, gas and water grew by 10.8 percent. The new industries and new products grew rapidly. The value added of high-tech industry and equipment manufacturing industry grew by 11.9 percent and 8.8 percent year on year respectively, 5.1 percentage points and 2.0 percentage points faster than that of the industrial enterprises above the designated size as a whole. The production of integrated circuits, new energy vehicles and industrial robots grew by 15.2 percent, 139.4 percent and 29.6 percent respectively. The sales-output ratio of the industrial enterprises above the designated size reached 97.9 percent, 0.3 percentage point higher than the same period last year. In March, the total value added of the industrial enterprises above the designated size went up by 6.0 percent year on year, or up by 0.33 percent month on month. In March, the manufacturing PMI was 51.5 percent, 1.2 percentage points higher than last month.

In the first two months of 2018, the total profits made by industrial enterprises above the designated size was 968.9 billion yuan, up by 16.1 percent year on year. The profit rate from principal businesses of industrial enterprises above the designated size was 6.1 percent, 0.33 percentage point higher than that of the same period last year.

3. Service Industry Grew Fast.

In the first quarter, the Index of Services Production increased by 8.1 percent year on year, 0.1 percentage point faster than the first two months, and 0.2 percentage point slower than the same period last year. Specifically, information transmission, software and information technology services, rental and business services maintained high growth rates. In March, the Index of Services Production increased by 8.3 percent year on year, 0.3 percentage point faster than that of the first two months, maintaining the same speed as the same period last year. In the first two months, the business revenue of service enterprises above the designated size grew by 14.1 percent, 0.7 percentage point faster than the same period last year.

In March, the Business Activity Index for services was 53.6 percent, 0.2 percentage point lower than last month but still higher than the average of last year. Specifically, the Business Activity Index for sectors like railway transport, air transport, postal services, telecommunication, broadcast, television and satellite transmission services, internet and software information technology services, monetary and financial services, capital market services and insurance all kept within the expansion range of 55 percent and above. In terms of market expectation, the Business Activities Expectation Index was 60.1 percent, maintaining above 60.0 percent for 10 months in a row.

4. Private Investment Grew Faster.

In the first quarter, the investment in fixed assets (excluding by rural households) was 10,076.3 billion yuan, a year-on-year growth of 7.5 percent, 0.4 percentage point slower than the first two months, and 1.7 percentage points slower than the same period last year. Specifically, the private investment reached 6,238.6 billion yuan, up by 8.9 percent, 0.8 percentage point faster than the first two months, 1.2 percentage points faster than the same period last year. The investment in the primary industry was 290.0 billion yuan, up by 24.2 percent year on year; the secondary industry 3,581.3 billion yuan, up by 2.0 percent, among which the investment in manufacturing was up by 3.8 percent; the tertiary industry 6,205.0 billion yuan, an increase of 10.0 percent, among which the investment in infrastructure was up by 13.0 percent. The investment in high-tech manufacturing industry increased by 7.9 percent, 0.4 percentage point faster than the total investment. In March, the investment in fixed assets (excluding by rural households) grew by 0.57 percent compared with last month.

5.The Floor Space of Commercial Buildings for Sale Continued to Decrease.

The total investment in real estate development in the first quarter was 2,129.1 billion yuan, a year-on-year growth of 10.4 percent, 0.5 percentage point faster than the first two months and 1.3 percentage points faster than the same period last year. In particular, the investment in residential buildings went up by 13.3 percent. The floor space newly started was 346.15 million square meters, up by 9.7 percent year on year. Specifically, the floor space of residential buildings newly started went up by 12.2 percent. The floor space of commercial buildings sold was 300.88 million square meters, up by 3.6 percent. The floor space of residential buildings sold was up by 2.5 percent. The total sales of commercial buildings were 2,559.7 billion yuan, a growth of 10.4 percent. Specifically, the sales of residential buildings were up by 11.4 percent. The land space purchased for real estate development was 38.02 million square meters, up by 0.5 percent year on year. By the end of March, the floor space of commercial buildings for sale was 573.29 million square meters, 11.38 million square meters less than that at the end of February. The funds in place for real estate development enterprises in the first quarter reached 3,677.0 billion yuan, up by 3.1 percent year on year.

6. Market Sales Maintained Active.

In the first quarter, the total retail sales of consumer goods reached 9,027.5 billion yuan, a year-on-year rise of 9.8 percent, 0.1 percentage point faster than the first two months, and 0.2 percentage point slower than the same period last year. Analyzed by different areas, the retail sales in urban areas reached 7,709.6 billion yuan, up by 9.7 percent, and the retail sales in rural areas stood at 1,317.9 billion yuan, up by 10.7 percent. Grouped by consumption patterns, the income of catering was 971.1 billion yuan, up by 10.3 percent; and the retail sales of goods were 8,056.4 billion yuan, up by 9.8 percent. Upgraded consumer goods grew fast. The retail sales of enterprises above the designated size of cosmetics and household appliances and audio-video equipments went up by 16.1 percent and 11.4 percent respectively, 6.2 percentage points and 3.4 percentage points faster than the same period last year. In March, the total retail sales of consumer goods rose by 10.1 percent year on year, 0.4 percentage point faster than the first two months, an increase of 0.73 percent month on month

In the first quarter, the online retail sales reached 1,931.8 billion yuan, a year-on-year growth of 35.4 percent, 3.3 percentage points faster than the same period last year, among which the online retail sales of physical goods were 1,456.7 billion yuan, an increase of 34.4 percent, accounting for 16.1 percent of the total retail sales, a year-on-year increase of 3.7 percentage points, and the online retail sales of non-physical goods were 475.1 billion yuan, an increase of 38.7 percent.

7. The Trade Surplus was Narrowed Substantially.

The total value of imports and exports in the first quarter was 6,751.6 billion yuan, an increase of 9.4 percent year on year. The total value of exports was 3,538.9 billion yuan, up by 7.4 percent; the total value of imports was 3,212.7 billion yuan, an increase of 11.7 percent. The trade balance was 326.2 billion yuan in surplus, 21.8 percent less than the same period last year. The trade structure was further improved. The import and export of general trade increased by 13.2 percent, accounting for 58.3 percent of the total value of the imports and exports, an increase of 2.0 percentage points compared with the same period last year. The export of mechanical and electronic products still took the lead. In the first quarter, the export of mechanical and electronic products increased by 9.5 percent, accounting for 59.4 percent of the total value of exports. The foreign trade with the top three trade partners continued to grow. Specifically, the foreign trade with European Union, United States and ASEAN went up by 8.2 percent, 6.3 percent and 13.7 percent respectively. The foreign trade with the countries jointly building the Belt and Road gained momentum. The foreign trade with Russia, Poland and Kazakhstan increased by 20.5 percent, 16.6 percent and 16.2 percent. In March, the total value of imports and exports was 2,245.3 billion yuan, a year-on-year decrease of 2.5 percent. The total value of exports was 1,107.8 billion yuan, down by 9.8 percent, and the total value of imports was 1,137.5 billion yuan, up by 5.9 percent.

In the first quarter, the export delivery value of industrial enterprises above the designated size reached 2,714.5 billion yuan, a year-on-year increase of 7.6 percent. In March, the export delivery value of industrial enterprises above the designated size reached 1,001.6 billion yuan, up by 4.0 percent.

8. The Market Prices Grew Mildly.

In the first quarter, the consumer price went up by 2.1 percent year on year, 0.1 percentage point slower than the first two months, and 0.7 percentage point higher than the same period last year. Specifically, the price went up by 2.2 percent in the urban areas and 2.0 percent in the rural areas. Grouped by commodity categories, prices for food, tobacco and alcohol went up by 1.9 percent year on year; clothing up by 1.2 percent; housing up by 2.4 percent; articles and services for daily use up by 1.6 percent; transportation and communication up by 0.7 percent; education, culture and recreation up by 2.2 percent; medical services and health care up by 6.0 percent; other articles and services up by 1.4 percent. In terms of food, tobacco and alcohol prices, prices for grain went up by 1.1 percent, pork down by 9.9 percent, fresh vegetables up by 6.6 percent. In March, the year-on-year consumer price was up by 2.1percent, 0.8 percentage point slower than February and down by 1.1 percent month on month.

In the first quarter, the producer prices for industrial products went up by 3.7 percent year on year, 0.3 percentage point slower than the first two months, 3.7 percentage points slower than the same period last year. In March, the producer prices for industrial products went up by 3.1 percent year on year, 0.6 percentage point slower than last month, and 0.2 percentage point slower month on month. In the first quarter, the purchasing prices for industrial producers were up by 4.4 percent year on year; In March the prices went up by 3.7 percent year on year, down by 0.3 percent month on month.

9. The Employment was Generally Stable.

From January to M arch, the surveyed unemployment rate in urban areas was 5.0 percent, 5.0 percent and 5.1 percent respectively, which was 0.2 percentage point, 0.4 percentage point and 0.1 percentage point lower than the same month last year. The urban surveyed unemployment rate in 31 major cities were 4.9 percent, 4.8 percent and 4.9 percent, which was 0.1 percentage point, 0.2 percentage point and 0.1 percentage point lower than the same month last year. At the end of the first quarter, the number of outside migrant workers reached 174.41 million, 1.88 million more than the same period last year, an increase of 1.1 percent.

10. The Resident Income Grew Steadily.

In the first quarter, the nationwide per capita disposable income of residents was 7,815 yuan, a nominal growth of 8.8 percent year on year, or a real increase of 6.6 percent after deducting price factors. In terms of permanent residence, the per capita disposable income of urban households was 10,781 yuan, a real growth of 5.7 percent after deducting price factors. The per capita disposable income of rural households was 4,226 yuan, up by 6.8 percent after deducting price factors. The per capita income of urban households was 2.55 times of the rural households, 0.02 less than the same period last year. The median of the nationwide disposal income was 6,580 yuan, a nominal increase of 8.5 percent.

11. The Supply-Side Structural Reform Produced Notable Results.

The supply-side structural reform was pushed forward solidly. In the first quarter, the industrial capacity utilization rate nationwide was 76.5 percent, 0.7 percentage point higher than the same period last year. The efforts of reducing inventory made remarkable achievements. At the end of March, the floor space of commercial buildings for sale decreased by 16.7 percent year on year. The effects of deleveraging continued to unfold. At the end of February, the asset-liability ratio of the industrial enterprises above the designated size was 56.3 percent, 0.8 percentage point less year on year. The cost for the real economy continued to decrease. For the first two months, the cost for per-hundred-yuan turnover of principal business of the industrial enterprises above the designated size was 83.98 yuan, 0.33 yuan less year on year. The investment in weak areas grew rapidly. In the first quarter, the investment in the management of ecological protection and treatment of environment pollution, management of public facilities and agriculture increased by 34.2 percent, 13.4 percent and 25.4 percent respectively, or 26.7 percentage points, 5.9 percentage points and 17.9 percentage points higher than the total investment.

The economic structure continued to be optimized. In the first quarter, the value added of the tertiary industry contributed to 61.6 percent of the GDP growth, 25.5 percentage points higher than that of the secondary industry. The final consumption expenditure’s contribution to the economic growth reached 77.8 percent, 46.5 percentage points higher than the total capital formation. New driving forces grew fast. In the first quarter, the number of newly registered enterprises was1.323 million, up by 5.4 percent year on year, an average of 14.7 thousand each day. The value added of industrial strategic and emerging industries went up by 9.6 percent year on year, 2.8 percentage points faster than that of the industrial enterprises above the designated size. Green development was moving forward steadily. In the first quarter, the energy consumption per unit of GDP dropped by 3.2 percent year on year.

Generally speaking, the national economy in the first quarter has maintained the momentum of steady and sound development and favorable conditions to support the economy moving toward high quality development are increasing, which have laid a sound foundation for the stable and healthy economic development of the whole year. However, we should also be aware that the international uncertainties are increasing, the problems of unbalanced and inadequate development in China are acute and the tasks for reform and development are daunting. At the next stage, we should take the Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era as the guideline, fully implement the spirit of the 19th National Congress of the Communist Party of China and the Central Economic Working Conference, follow the arrangements of the Report on the Work of the Government, adhere to the general working guideline of making progress while maintaining stability, implement the new development philosophy, deepen the supply-side structural reform, implement the innovation-driven development, expand the reform and opening up, strengthen the internal forces driving economic growth, guide and stabilize expectations and promote the sustainable and healthy development of the economy.

Notes:

1. The growth rate of gross domestic product, value added of industrial enterprises above designated size and its sub-items are real growth by using comparable prices. The growth rates of other indicators are nominal growth by using current prices unless otherwise specified.

2. According to the auto-revision function of the seasonal adjustment model, GDP in each quarter and the month-on-month changes of the value added of industrial enterprises above designated size, investment in fixed assets (excluding rural households), and total retail sales of consumer goods have been revised. The revised figures, quarter-on-quarter GDP data for the first quarter of 2018 and other indicators for March 2018 are as follows:

The quarter-on-quarter growth of GDP in 2017 and the first quarter of 2018 were 1.5 percent, 1.8 percent, 1.8 percent, 1.6 percent, and 1.4 percent respectively.

3. Industrial enterprises above the designated size are industrial enterprises with annual revenue from principle business over 20 million yuan.

4. The Index of Services Production is the change of production in the reporting period compared to the base period with the price factors deducted.

5. Enterprises above the designated size in total retail sales of consumer goods include wholesale enterprises, retail enterprises and lodging and catering enterprises with annual revenue from principle business over 20 million yuan, 5 million yuan and 2 million yuan respectively.

The data for the total retail sales of consumer goods of the same period last year have been revised according to the results of the third national agricultural census and related regulations and the growth rates are calculated on a comparable base.

Online retail sales refer to the retail sales of goods and services realized through internet trading platforms (including self-built websites and third-party platforms). Goods and services include physical goods and non-physical goods (e.g. virtue goods and services).

The total retail sales of consumer goods include the online retail sales of physical goods, but not the non-physical goods. 

6. The median of national per capita disposable income of urban and rural households refers to the per capita disposable income of households which lies in the middle of all surveyed households ranked from low to high on the basis of per capital disposable income level.

7. Outside migrant workers refer to those who work in areas other than the administration area where they register their households permanently at the reference time.

8. Data of imports and exports are from the General Administration of Customs.

9. Due to the round-off reasons, the subentries may not add up to the aggregate totals.

In case of any differences between English translation and the original Chinese text, the Chinese edition shall prevail.