China: GDP Growth Moderates

Econintersect:  The first quarter saw the Chinese economy slow to 7.7% growth year-over-year.  This was less than the 4Q 2012 growth of 7.9% and also less than expected which was 8.0% according to Reuters.  The results reported by the National Bureua of Statistics of China were characterized by the government agency as indicating “the overall national economy realized steady development.”  The quarter-to-quarter growth was 1.6%, much lower than the three prior quarters.

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The following is the complete press release by the National Bureau of Statistics of China:

National Bureau of Statistics of China

15 April 2013

Since the beginning of 2013, faced with the complicated and volatile economic environment at home and abroad, the Central Party Committee and the State Council have committed to the general tone of making progress while ensuring the stability, centered on improving the quality and efficiency of economic growth, continued to carry out the proactive fiscal policy and prudent monetary policy, continuously strengthened and improved macro regulation, speeded up the transformation of governmental functions, and accelerated the transformation and upgrading and restructuring of the industry. As a result, the overall national economy realized steady development.

According to the preliminary estimation, the gross domestic product (GDP) of China in the first quarter of this year was 11,885.5 billion yuan, a year-on-year increase of 7.7 percent. The value added of the primary industry was 742.7 billion yuan, up by 3.4 percent; that of the secondary industry was 5,456.9 billion yuan, up by 7.8 percent; and that of the tertiary industry was 5,685.9 billion yuan, up by 8.3 percent. In the first quarter, the gross domestic product went up by 1.6 percent on quarterly bases.

1. Agricultural Production Showed Good Momentum and Livestock Production Witnessed Steady Growth.

According to the planting intention survey conducted among 90 thousand rural households, the planting area for rice would go up by 1.0 percent in 2013 nationwide. Specifically, the area for early rice and late double-cropping rice would be basically the same with that in the previous year, while that for middle-season rice and late single-cropping rice would go up by 1.6 percent, that for corn up by 4.1 percent. The area for soybean and cotton would decrease by 8.5 percent and 6.2 percent respectively. The proportion of first and second grade seedlings of winter wheat accounted for 87.2 percent of the total. In the first quarter, the total output of pork, beef, mutton and poultry reached 22.87 million tons, a year-on-year growth of 2.6 percent. Of this total, the output of pork was 15.54 million tons, up by 2.8 percent. The number of pigs in stock was 454.73 million, down by 0.3 percent, while the number of slaughtered pigs was 204.89 million, a year-on-year increase of 2.4 percent.

2. Overall Industrial Production Grew Steadily with a Recovery Growth for Enterprises Profits.

In the first quarter, the total value added (calculated at comparable price) of the industrial enterprises above designated size was up by 9.5 percent year-on-year, or 2.1 percentage points lower than that in the same period of last year and 0.5 percentage point lower than that in the year of 2012. An analysis on different types of enterprises showed that the value added growth of the state-owned and state holding enterprises went up by 5.2 percent; collective enterprises 6.7 percent; share-holding enterprises 11.3 percent; and 6.9 percent growth for enterprises funded by foreign investors or investors from Hong Kong, Macao and Taiwan provinces. The year-on-year growth of heavy industry was 9.8 percent, and 8.7 percent for the light industry. Out of 41 industrial divisions, 40 of them registered year-on-year growth. In terms of different areas, the growth in eastern, central and western regions was 9.1 percent, 10.1 percent and 10.3 percent respectively. Out of the 464 kinds of industrial products, 318 kinds realized a year-on-year increase with electricity up by 2.9 percent, crude steel up by 9.1 percent, rolled steel up by 12.3 percent, cement up by 8.2 percent, plain glass up by 8.4 percent, ten kinds of nonferrous metals up by 10.6 percent, coke up by 9.1 percent, sulfuric acid (converted into 100%) up by 8.9 percent, caustic soda (converted into 100%) up by 3.8 percent, chemical fiber up by 5.5 percent, ethylene up by 3.0 percent, micro computer equipment up by 11.5 percent, and motor vehicles up by 13.5 percent. Specifically, the output of cars was up by 16.9 percent. The output of integrated circuits was down by 7.3 percent. The sales ratio of industrial enterprises above designated size in the first quarter was 97.2 percent, down by 0.2 percentage point. The export delivery value reached 2,478.5 billion yuan, up by 6.2 percent. In March, the total value added of the industrial enterprises above designated size was up by 8.9 percent year-on-year, or up by 0.66 percent month-on-month.

In the first two months of this year, the profits made by industrial enterprises above designated size stood at 709.2 billion yuan, up by 17.2 percent year-on-year, or 11.9 percentage points higher than that in the year of 2012, while it was down by 5.2 percent in the same period of last year. Among the 41 industrial divisions, 30 divisions registered year-on-year increase in profits, 8 divisions witnessed reduction in profits, 2 divisions turned into profits, and 1 division suffered less losses. In the first two months, the costs for per-hundred-yuan turnover of primary activities of the industrial enterprises above designated size reached 84.46 yuan. The profit rate of industrial enterprises above designated size from their primary activities was 5.18 percent.

3. Investment in Fixed Assets Enjoyed Relatively Fast Growth and Sales in Real Estate Increased Substantially.

In the first quarter, the investment in fixed assets (excluding rural households) was 5,809.2 billion yuan, a year-on-year growth of 20.9 percent (a real growth of 20.7 percent after deducting price factors), the same growth with that in the same period of last year, or 0.3 percentage point higher than that in the year of 2012. Of this total, that in the state-owned and state holding enterprises reached 1,802.9 billion yuan, an increase of 18.7 percent; private investment reached 3,676.3 billion yuan, up by 24.1 percent. In term of different areas, the growth in eastern, central and western regions was 19.4 percent, 24.1 percent and 24.2 percent respectively. The investment in the primary industry reached 93.0 billion yuan, up by 31.4 percent year-on-year; that in the secondary industry was 2,463.5 billion yuan, up by 16.2 percent; and that in the tertiary industry was 3,252.7 billion yuan, up by 24.5 percent. Of the investment in the secondary industry, that in industry reached 2,425.4 billion yuan, up by 17.4 percent. Of this total, the investment in mining was 133.8 billion yuan, up by 2.7 percent; manufacturing 2,047.3 billion yuan, up by 18.7 percent; and the production and supply of electricity, heat, gas and water 244.3 billion yuan, up by 15.3 percent. The investment in infrastructural facilities (excluding the production and supply of electricity, heat, gas and water) was 852.5 billion yuan, up by 26.9 percent. The funds in place for investment in the first quarter of 2013 were 8,489.9 billion yuan, up by 19.6 percent. Specifically, the government budgetary funds went up by 21.8 percent, domestic loans up by 11.1 percent, self-raising funds up by 17.0 percent and foreign investment up by 6.3 percent. The total planned investment in newly-started projects was 4,142.9 billion yuan, a year-on-year increase of 14.0 percent. The number of projects started in the first quarter was 67,698, or 5,920 more than that in the same period of 2012. In March, the month-on-month growth of the investment in fixed assets (excluding rural households) was1.59 percent.

In the first quarter, the total investment in real estate development was 1,313.3 billion yuan, a year-on-year growth of 20.2 percent (a real growth of 19.9 percent after deducting price factors), or 3.3 percentage points lower than that in the same period of 2012 and 4.0 percentage points higher than that in the previous year. Of this total, the investment in residential buildings went up by 21.1 percent, or 2.1 percentage points higher than that in the same period of 2012 and 9.7 percentage points higher than that in the previous year. Floor space of houses newly started in the first quarter was 388.73 million square meters, down by 2.7 percent. Specifically, the floor space of residential buildings started in the first quarter decreased by 0.8 percent. The floor space of commercial buildings sold reached 208.98 million square meters, up by 37.1 percent, or 35.3 percentage points higher than that in the year of 2012, while it was down by 13.6 percent in the same period of last year. Of this total, that of residential buildings went up by 41.2 percent. The sales of commercial buildings in the first quarter were 1,399.2 billion yuan, up by 61.3 percent, or 51.3 percentage points higher than that in 2012, while it was down by 14.6 percent in the same period of last year. Of this total, that of residential buildings was up by 69.0 percent. In the first quarter of this year, the land space purchased by real estate development enterprises was 61.34 million square meters, down by 22.0 percent, the decline of which was 18.1 percentage points as compared with that in the same period of last year and 2.5 percentage points as compared with that in 2012. The floor space of commercial buildings for sale was 424.41 million square meters, up by 40.9 percent, which was 5.4 percentage points higher than that in the same period of last year and 13.9 percentage points higher than that in the previous year. The actual funds for real estate development enterprises in the first quarter reached 2,696.2 billion yuan, up by 29.3 percent, or 21.1 percentage points higher than that in the same period of last year and 16.6 percentage points higher than that in the previous year. Specifically, the growth of domestic loans was up by 19.8 percent, self-raising funds up by 13.6 percent and foreign investment up by 13.6 percent.

4. Market Sales Kept Steady Growth While That of the Catering Industry Dropped Slightly.

In the first quarter, the total retail sales of consumer goods reached 5,545.1 billion yuan, an increase of 12.4 percent (a real growth of 10.8 percent after deducting price factors), or 2.4 percentage points lower than that in the same period of last year and 1.9 percentage points lower than that in the year of 2012. Specifically, the retail sales of the enterprises (units) above designated size stood at 2,704.5 billion yuan, up by 10.3 percent. Analyzed by different areas, the retail sales in urban areas reached 4,789.4 billion yuan, up by 12.2 percent, and that in rural areas stood at 755.7 billion yuan, up by 13.9 percent. Grouped by consumption patterns, the total income of catering industry was 589.0 billion yuan, up by 8.5 percent year-on-year, or 4.8 and 5.1 percentage points lower respectively; and retail sales of goods was 4,956.1 billion yuan, up by 12.9 percent, or 2.1 and 1.5 percentage points lower. In particular, the retail sales of enterprises (units) above designated size reached 2,517.0 billion yuan, up by 11.1 percent. Specifically, the sales of motor vehicles rose by 6.4 percent, or 4.6 percentage points lower than that in the same period of 2012; furniture grew up by 22.4 percent, or 0.3 percentage point lower; and household appliances and audio-video equipment went up by 16.7 percent, or 16.1 percentage points higher. In March, the total retail sales of consumer goods rose by 12.6 percent year-on-year (a real growth of 11.7 percent after deducting price factors), and the month-on-month growth was1.23 percent.

5. The Growth of Imports and Exports Picked Up with Increased Trade Surplus.

The total value of imports and exports in the first quarter was 974.7 billion US dollars, a year-on-year growth of 13.4 percent. The total value of exports was 508.9 billion US dollars, up by 18.4 percent; and that of imports was 465.8 billion US dollars, up by 8.4 percent. The trade surplus was 43.07 billion US dollars. Of the total value of imports and exports, that from general trade was 486.3 billion US dollars, up by 7.4 percent; and that from processing trade was 323.0 billion US dollars, up by 6 percent. Among the value of exports, that from general trade was 233.7 billion US dollars, up by 16.6 percent; and that from processing trade was 203.6 billion US dollars, up by 3.9 percent. Among the value of imports, that from general trade was 252.6 billion US dollars, up by 0.1 percent; and that from processing trade was 119.4 billion US dollars, up by 9.9 percent. In March, the total value of imports and exports was 365.3 billion US dollars, up by 12.1 percent year-on-year. The total value of exports was 182.2 billion US dollars, up by 10.0 percent; and that of imports was 183.1 billion US dollars, up by 14.1 percent.

6. The Year-on-Year Growth of Consumer Price Fell Back while That of Producer Price Declined.

In the first quarter, the consumer price went up by 2.4 percent year-on-year, or 1.4 percentage points lower than that in the same period of last year and 0.2 percentage point lower than that in the year of 2012. Specifically, the price went up by 2.4 percent in cities and 2.6 percent in rural areas. Grouped by commodity categories, prices for food rose by 3.8 percent; tobacco, liquor and articles rose by 1.2 percent; clothing up by 2.3 percent; household facilities, articles and maintenance services up by 1.6 percent; health care and personal articles grew by 1.7 percent; transportation and communication went down by 0.1 percent; recreation, education, culture articles and services grew by 1.4 percent; and housing went up by 2.9 percent. In terms of food prices, that for grain grew up by 5.0 percent, oil or fat up by 4.7 percent, pork down by 3.8 percent and fresh vegetables up by 0.5 percent. In March, the consumer prices went up by 2.1 percent year-on-year, or down by 0.9 percent month-on-month. In the first quarter, the producer prices for industrial products went down by 1.7 percent. In March, the price dropped by 1.9 percent year-on-year, and the month-on-month growth remained unchanged (the rate of increase or decline is 0). In the first quarter, the purchasing price for industrial producers was down by 1.9 percent year-on-year. In March, the price was down by 2.0 percent year-on-year and 0.1 percent month-on-month.

7. Urban and Rural Residents’ Income Continued to Rise with a Higher Growth for Rural Residents.

In the first quarter, the per capita total income of urban households was 8,015 yuan. Specifically, the per capita disposable income of urban households was 7,427 yuan, a nominal growth of 9.3 percent, or a real growth of 6.7 percent after deducting price factors. Of the per capita total income of urban households, the nominal year-on-year growth of wage income was 8.3 percent; net income from business operation 9.2 percent; property income 11.2 percent and transferred income 8.8 percent. The per capita cash income of rural households was 2,871 yuan, up by 12.2 percent, or 9.3 percent in real terms. Specifically, the growth of wage income was 16.5 percent; household operation income 7.3 percent; property income 27.0 percent; and 12.2 percent from transferred income. The median of per capita disposable income of urban households was 6,220 yuan, up by 9.9 percent, while that of per capita cash income of rural households was 2,107 yuan, up by 12.5 percent year-on-year. The number of rural migrant workers at the end of the first quarter was 166.45 million, which was 2.74 million more than that in the previous year, or up by 1.7 percent. The monthly income of migrant workers was 2,436 yuan, up by 12.1 percent.

8. Money Supply Grew Steadily with More Newly Increased Loans Year-on-year.

By the end of March, the balance of broad money (M2) was 103.61 trillion yuan, a year-on-year growth of 15.7 percent, or 1.9 percentage points higher than that at the end of the previous year; the balance of narrow money (M1) was 31.12 trillion yuan, up by 11.9 percent; the balance of cash in circulation (M0) was 5.57 trillion yuan, up by 12.4 percent. The amount of outstanding loans of all financial institutions at the end of March was 65.76 trillion yuan, while the amount of outstanding deposits was 97.93 trillion yuan. In the first quarter, the newly increased loans reached 2.76 trillion yuan, an increase of 294.9 billion yuan; the newly increased deposits were 6.11 trillion yuan, an increase of 2.35 trillion yuan year-on-year.

In the next phase, we should conscientiously implement the spirits of the 18th National Congress of the Communist Party of China, the requirements posed out at the Central Economic Work Conference and the overall arrangements made in the Report on the Work of the Government, adhere to the main theme of scientific development and the mainline of transforming economic development mode, keep following the general tone of progressing steadily, pay more attention to improving macro regulation, strengthening reform and innovation and optimizing governmental functions, and make great efforts to promote a sustainable and sound development of national economy, accelerate transformation and upgrading of economic structure and continuously improve people’s livelihood.

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, quarterly GDP of 2012 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 from February 2012 to February 2013 have been revised. The revised figures and figures for March as well as GDP of the first quarter of 2013 are as follows:

The quarter-on-quarter growth of GDP in each quarter of 2012 and in the first quarter of 2013 was 1.6 percent, 1.9 percent, 2.1 percent, 2.0 percent and 1.6 percent respectively.

3. From 2012, the NBS implemented the new Industrial Classification for National Economic Activities (GB/T4754-2011). For more detailed information, please refer to: http://www.stats.gov.cn/tjbz

4. The eastern areas include 11 provinces and municipalities: Beijing, Tianjin, Hebei, Liaoning, Shanghai, Jiangsu, Zhejiang, Fujian, Shandong, Guangdong and Hainan; central areas cover 8 provinces: Shanxi, Jilin, Heilongjiang, Anhui, Jiangxi, Henan, Hubei and Hunan; western area include 12 provinces, autonomous regions and municipality: Inner Mongolia, Guangxi, Chongqing, Sichuan, Guizhou, Yunnan, Tibet, Shaanxi, Gansu, Qinghai, Ningxia and Xinjiang.

5. The median of per capita income of urban and rural households refer to the per capita income of household lied in the middle of all surveyed households which are ranked from low to high based on per capital income level.

6. Statistics of imports and exports comes from the General Administration of Customs; and data about money supply and deposits and loans comes from the People’s Bank of China.

John Lounsbury

Sources:

• Overall Economic Development was Stable in the First Quarter of 2013 (Press release, National Bureau of Statistics of China, 15 April 2013)

• Chinese economy grows 7.7% in Q1 (Simon Rabinovitch and Jamil Anderlini, Financial Times, 15 April 2013)

• China first-quarter GDP growth slips to 7.7 percent year-on-year (Reuters, 15 April 2013)

• China GDP Growth Rate (Trading Economics, 15 April 2013)