Insight into the economic puzzle: the weak economic recovery pattern is forming

Abstract China's GDP in the first quarter increased by 7.7% year-on-year, down 0.2 percentage points from the fourth quarter of last year. For the first time in this century, the economic recovery has only lasted for one quarter. After the data was released, major institutions at home and abroad have lowered their forecasts for China's economic growth this year. ...
China's GDP in the first quarter increased by 7.7% year-on-year, down 0.2 percentage points from the fourth quarter of last year. For the first time in this century, the economic recovery has only lasted for one quarter. After the data was released, major institutions at home and abroad have lowered their forecasts for China's economic growth this year. Judging from the partial data released in April, the momentum of slowing growth continues. Some people think that this year the economy may once again face the situation of falling back quarter by quarter in the previous two years. However, if the internal logic contained in the economic data is explored, it will lead to quite different conclusions: the current economic recovery is indeed insufficient, but the pattern of weak recovery is being initially established.

It is based on four aspects of the judgment that the current economy is in a weak recovery phase. First, the 7.7% growth in the first quarter is not bad. This rate is higher than 7.6% in the second quarter of last year and 7.4% in the third quarter. It is also higher than the expected target of 7.5% this year, and the GDP growth rate in the last four quarters is 7.4. In the range of % to 7.9%, the growth is stable. From an international comparison point of view, the economic growth of major countries in the first quarter has slowed down. For this reason, many countries have been forced to cut interest rates. China’s growth rate is still second to none in the BRICS countries, and it is also among the best in the world. It will attract a large influx of international capital. In addition, in the first quarter, more than 3 million new jobs were created in urban units in China, and the number of rural migrant workers increased by 1.7% year-on-year. The economic slowdown did not bring about a deterioration in the employment situation, which is in stark contrast with European and American countries.

Second, structural adjustment has made positive progress. Statistics from the National Bureau of Statistics show that the growth rate of the added value of the tertiary industry in the first quarter was 8.3%, which was 0.5 percentage points higher than that of the secondary industry. The added value of the tertiary industry accounted for 47.8% of GDP, which was higher than the same period of the previous year. 1.6 percentage points. From the internal view of the industrial structure, the added value of high-tech industries increased by 11.9%, which was significantly higher than the same period last year and the fourth quarter of last year. The coordination of regional structure is also increasing. The eastern region is ahead of the transition and upgrading. The growth rate of industry and investment in the central and western regions is generally higher than the national average.

Again, some economic indicators have emerged or have continued to gain momentum. The export situation exceeded expectations. The first quarter increased by 18.4% compared with the same period of last year, and increased by 10.8 and 10.5 percentage points respectively over the same period of last year and last year; industrial profits began to recover, and the profits of industrial enterprises above designated size increased by 12.1%, compared with the same period last year and last year. The annual increase was 13.4 and 6.8 percentage points respectively; the investment continued to grow at a high rate, reaching 20.9% in the first quarter, which was the same as that of the same period of last year; the income of urban and rural residents increased rapidly, and the per capita disposable income of urban residents deducted from the price factor by 6.7%, and the per capita income of rural residents Cash income actually increased by 9.3%; price growth continued to be at a low level. In March, consumer prices rose by 2.1% year-on-year. Consumer prices in January-March rose by 2.4% year-on-year, both of which were significantly lower than last year.

Finally, the future economy is expected to maintain steady growth and even rebound slightly. On the one hand, the new credit measured by the scale of social financing reached 2.1 trillion yuan per month in the first quarter, setting a peak in the quarterly growth rate. Due to the time lag, the strong growth of credit will drive economic growth in the following quarters. . On the other hand, according to the National Information Center, the proportion of Chinese enterprises' inventories to GDP increased to the lowest point in history last year. Although stocks are still falling at the beginning of this year, the chain has started to rise, and enterprises will start to increase from April. Inventories, thus driving the next phase of accelerated economic growth.

The continuation of the weak recovery pattern not only ensures that economic growth will remain stable, but also guarantees that the price rise is controllable, which provides space for economic restructuring. However, the hidden worry still exists. Once it is not handled well, the beginning of a weak economic recovery may become the beginning of a new round of economic slowdown. Therefore, in the face of this new situation, macroeconomic policies must be stabilized. This includes adhering to the established tone of regulation and control, as well as stabilizing people's policy expectations. At the same time, we must further ensure that economic growth will not be ups and downs by invigorating micro policies and supporting social policies.

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