China's economy stabilizes and recovers with high-quality development

Editor's note: Zhou Liping is a researcher at the Institute of Finance and Banking under the Chinese Academy of Social Sciences. The article reflects the author's opinions and not necessarily the views of CGTN. It has been translated from Chinese and edited for brevity and clarity.

In 2023, China's economy has overcome cyclical and structural contradictions, seeking progress amid stability and achieving high-quality development. The growth of value added in the primary and secondary industries slowed down, whereas the growth of value added in the tertiary industry noticeably accelerated when compared to the average of the same period over the past three years. The "troika" of growth drivers, namely, consumption, investment, and import and export, have all undergone structural adjustments.

Investment: From January to November, national fixed asset investment amounted to 46.08 trillion yuan ($6.50 trillion), up by 2.9 percent year on year. The value added of industrial enterprises above the designated size grew by 4.3 percent year on year, while the small and medium-sized enterprises development index reached 89.3. Production and operation expectations improved further, and structure continued to be optimized. Investments in both manufacturing and infrastructure sectors maintained resilience.

Consumption: Between January and November, the total retail sales of consumer goods surged to 42.79 trillion yuan, registering a 7.2 percent year-on-year growth. Household consumption structure continued to be optimized, with the proportion of development-oriented consumption (expenditures on transportation, communication, education, culture, entertainment, and healthcare) rising to 33.4 percent, registering a 1.4 percent year-on-year growth. In the first three quarters, domestic consumption contributed 83.2 percent to the GDP growth, a significant increase of 41.3 percent compared to the same period last year.

Import and export: Factors such as the global economic slowdown and high inflation in developed countries have led to a decline in external demand. In the first 11 months, China's total import and export value was 37.96 trillion yuan, unchanged from the same period last year. Exports amounted to 21.6 trillion yuan, growing by 0.3 percent; while imports reached 16.36 trillion yuan, down by 0.5 percent. The trade surplus stood at 5.24 trillion yuan, expanding by 2.8 percent. Entering the fourth quarter, China's foreign trade development has welcomed more positive factors, with the trade structure continuing to optimize, trade of private enterprises maintaining growth, and exports expected to stabilize and rise.

CPI and PPI: From January to November, consumer price index (CPI) increased by 0.3 percent year on year and CPI in November declined 0.5 percent month on month. Meanwhile, core CPI remained stable. Considering various factors like the tail-raising factor, the monthly average of the CPI year-on-year increase in the fourth quarter may hover around zero, with the CPI year-on- year increase for the full year expected to settle around 0.3 percent. In November, the purchasing managers' index (PMI) decreased by 0.1 percentage point month on month to 49.4 percent, indicating a slight decline in the manufacturing industry's prospects. In the fourth quarter, China's producer price index (PPI) may remain stable or experience small fluctuations, and the annual PPI is expected to fall by 3.0 percent year on year.

Overall, China's economy has experienced a "wave-like" recovery this year, making new strides in high-quality transformation. In the fourth quarter, comprehensive macroeconomic policy has exhibited evident effects, and the economy is continuing to stabilize. Throughout the year, China's economy will maintain a trajectory of steady growth, contributing to global economic recovery.

(Cover via CFP)