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Good Grades ! China GDP Grew 12.7 % Year on Year in the First Half ! Rapid Growth in High-tech Manufacturing

Resource from:  CBCC Likes:122
Jul 20,2021

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The economic semi-annual report figures in the first year of the "14th Five-Year Plan" are eye-catching. The National Bureau of Statistics released China's economic data for the first half of the year on July 15. According to preliminary calculations, in the first half of the year, China’s gross domestic product (GDP) was 5,32167 billion yuan (RMB, the same below), a year-on-year increase of 12.7% at comparable prices, a decrease of 5.6 percentage points from the first quarter; an average increase of 5.3% over the two years. The average growth rate was 0.3 percentage points faster than that in the first quarter. On the same day, the China News Service "State is the Forum: 2021 China Economic Situation Analysis Meeting" was held in Beijing. A number of experts analyzed the operation of the national economy in the first half of the year from the perspectives of economic structure, trade, fiscal and taxation, and looked forward to the economic development trend throughout the year.

In the first half of the year, the first industry added 2840.2 billion yuan, an increase of 7.8 %, an average increase of 4.3 % in two years. The added value of the secondary industry is 20715.4 billion yuan, an increase of 14.8 %, an average increase of 6.1 % in two years. The added value of the tertiary industry is 29661.1 billion yuan, an increase of 11.8 %, an average increase of 4.9 % in two years. Gross domestic product rose 1.3 per cent in the second quarter.

China ' s economy has a characteristic of coordinated growth, more balanced, which reflects the characteristics of China ' s economic development strategy is the development of the real economy, to avoid empty shell, hollow, so the first industry, the second industry growth rate is good, special period China shows the effect of long-term economic development strategy, from the data can be seen that China ' s economy presents a stable and strengthening trend. ‘ Bai Jingming, a researcher and former vice president of China Academy of Fiscal Sciences, said.

Bai Jingming said that after 2018, high-tech industries have developed rapidly. In the first half of this year, the national value added of high-tech manufacturing increased by 22.6 per cent year on year, an average of 13.2 per cent over the two years. In terms of products, the output of new energy vehicles, industrial robots and integrated circuits increased by 205.0 %, 69.8 % and 48.1 % respectively, with an average growth rate of more than 30 % in both years. Over the same period, industrial added value above the national scale increased by 15.9 per cent year on year, with an average increase of 7.0 per cent over the two years. High-tech industries have driven industrial growth, especially the rapid growth of new energy vehicles. This year, the implementation of enterprise R & D expense deduction 75 % policy will increase the proportion of manufacturing enterprises to 100 %, encourage enterprises to increase R & D investment. Full monthly return of VAT increments to advanced manufacturing enterprises.


Bai Jingming said that in the first half of the year, China ’ s investment in high-tech industries also grew rapidly, reaching a year-on-year growth rate of 23.5 %, with an average growth of 14.6 % in the two years. Among them, investment in high-tech manufacturing industry and high-tech service industry increased by 29.7 % and 12.0 % respectively, with an average increase of 17.1 % and 9.5 % in the two years. Expectations become better, stimulate investment, expectations and investment to form a virtuous circle. ’Fiscal and taxation policies support the development of high-tech industries. ’Bai Jingming said.


In addition, the growth rate of the development of high-tech industries is also shown in industrial profits. The profit of operating income of industrial enterprises above designated size is 7.1 %, which is 0.5 percentage points higher than that in 2020. The total profit increases by 21 % on average in two years, and this growth rate is also quite fast. It is this growth and profit driving that attract further investment in the market. Coupled with new energy vehicles, industrial robots, integrated circuits are very high growth, which shows that China ' s economic restructuring has entered the harvest period. ’ Bai Jingming analysis.

In the first half of the year, the total value of imports and exports of goods was 18,065.1 billion yuan, a year-on-year increase of 27.1%. Among them, exports were 9,849.3 billion yuan, a year-on-year increase of 28.1%; imports were 8,215.7 billion yuan, a year-on-year increase of 25.9%; imports and exports offset, a trade surplus of 1,633.6 billion yuan. The trade structure continued to be optimized.


Zhang Jianping, director of the Research Center for Regional Economic Cooperation of the Chinese Academy of Commerce, said that there is an old Chinese saying that "real gold can only be tested in the raging fire." In the context of the current epidemic and the global recession, China’s exports can maintain positive growth for 13 consecutive months, which is especially commendable and beyond expectations.


Zhang Jianping said that from a fundamental point of view, China’s foreign trade has experienced a “roller coaster” market in 2020. However, because of China’s effective epidemic prevention and anti-epidemic and rapid resumption of work and production, last year’s “troika” of China’s economic growth was driven by foreign trade. The change from negative to positive was realized sooner. China's position as the world's largest manufacturing center has been further consolidated and improved, and the organization and efficiency of China's industrial chain have also impressed the world. This has promoted China's status as the largest trade in goods in the world and further expanded its market share.


"This year, judging from the current fundamentals, China is still the main economy where the global economic and social order has recovered the best and the economic momentum is relatively abundant." Zhang Jianping said that the global economy is now on the path of recovery, which means that the global market is on the way to goods and services. The demand for China is also recovering, and it will be better to stimulate China’s foreign trade.


"Now that China's foreign trade structure continues to optimize, and the general trade accounted for more than 60%, it means that the added value of China's current brand and technology can be improved. China has taken a very solid step from being a trading country to a trading power. The export of electromechanical products accounted for 59.2% of total exports in half a year, close to 60%, an increase of 0.6% over the same period last year. Such a high proportion of exports of electromechanical products also shows that China's industrial structure continues to optimize, especially large-scale complete sets of equipment, machinery, Products such as electronics and automobiles are very competitive among them." Zhang Jianping said.

Zhang Jianping said that another structural optimization is reflected in China's private enterprises becoming the largest export force. The import and export of private enterprises accounted for 47.8% of total import and export, an increase of 2.8 percentage points from the same period last year. The proportion of foreign investment is relatively lower than that of private enterprises.


"With the improvement of foreign trade competitiveness and the performance of the advantages of the entire industry system, China's global foreign trade market share is now further expanding, hitting a record high, but China's global foreign trade share still has room for further improvement." Zhang Jianping said.

On the whole, the national economy continued to recover steadily in the first half of the year, strengthened with stability, and improved with stability. Then, what will be the economic trend of my country in the second half of the year?


"In the second half of the year, the economic growth will be stable while improving, and the trend of steady and strengthening will remain unchanged. Even if the growth rate has declined, it is normal, but I don't think it will be large. In addition, the macro policy in the second half of the year still plays a very important role. The internal growth of the economy must be integrated with each other." Bai Jingming said.


"Now pay special attention to the factor of price increase. In the second half of fiscal policy, tax cuts and fee reductions will continue to increase, and expenditures will continue to expand, but it should be carried out in an orderly manner. From this year's fiscal 1 to According to the data in May, there may be over-revenue this year, because the price has risen, so the finance is relatively stable. Of course, the over-revenue is also a good thing. It can be allocated to the adjustment fund to create future tax and fee reductions and future expansion of expenditures. One condition." Bai Jingming said.


Wang Jun, chief economist of Centaline Bank, said that although the factory price index (PPI) of industrial producers has risen since the beginning of this year, it is difficult for historical industrial product inflation to be fully transmitted to the downstream. In addition, the current period is just at the bottom of the cycle. It does not support the rapid and substantial increase in terminal prices.


Wang Jun pointed out that considering base factors and other factors, the CPI will rise slightly in the second half of the year. It is expected that the CPI will run above 2% in the third and fourth quarters, but it will certainly not exceed the target of "around 3%" set by the government at the beginning of the year.


When it comes to the policy level, Wang Jun believes that the focus of China's policy in the second half of the year needs to take into account stable growth, structural adjustment, and promotion of transformation, so as to prevent the economy from falling beyond expectations. He mentioned that China's monetary policy has made some active adjustments recently, and the fiscal policy should also maintain the necessary expansion and forward-looking, and make further efforts in response to the current structural and uneven recovery.


Speaking of China's economic performance in the first half of the year, Zong Liang, Bank of China's chief researcher, believes that "the numbers are still very good." In his opinion, China has made a good start in the first year of the "14th Five-Year Plan". If the current trend continues, it is expected that the annual economic growth rate will remain at 8% or above.


Zong Liang suggested that in the future, it is necessary to consider the organic connection between 2021 and 2022 to prevent various adverse international environments, and at the same time, the supply side must be able to better meet market demand and achieve dynamic balance.


Therefore, Zong Liang put forward four suggestions, one is to reasonable arrangement of fiscal and monetary policy, in order to steady economic growth, to take me as the main, the total and structure parallel, in promoting economic growth steadily adjust and optimize the structure. Two is to increase the people 's livelihood support, from the demand level to expand the middle-income groups, from the investment aspect to make the supply always around the people 's livelihood. Three is to stabilize market expectations. 4. Beware of the transmission effect of external input risks. Zong Liang said, in order to resist all kinds of external risks, we should maintain the strength of China ' s monetary policy, effectively support China ' s economic development, and do our own economy well.


(CBCC)
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