IV. We have intensified reform and opening up, and continued to boost the vitality of development.
To assess economic development, we should not only look at short-term development levels but also at long-term development potential. China boasts rich experience in macro-control and abundant policy space and enjoys great resilience, potential, and room for maneuver in its development. China is, therefore, well equipped to maintain steady, healthy, and sustainable economic development. In recent years, we have continued to bolster reforms to streamline administration, delegate power, improve regulation, and upgrade services, stepped up efforts to create an internationalized business environment that is market- and law-based, more actively expanded opening up, and implemented a management system based on pre-establishment national treatment and a negative list in an orderly manner. By doing so, we have vigorously promoted mass entrepreneurship and innovation, worked faster to foster new growth drivers and replace old growth drivers with new ones, injected strong impetus for sustained and sound economic development, and provided ample support for sustainable economic development. Looking forward, the fundamentals of China’s positive long-term economic prospects will not change.
1. New growth drivers have been accumulated and strengthened.
The negative list for market access was revised and improved, the national administrative service platform went online on a trial operation basis, the business environment was continually enhanced, and new industries as well as new forms and models of business multiplied rapidly. In the first half of this year, the value added of strategic emerging manufacturing industries saw a year-on-year increase of 7.7%, 1.7 percentage points higher than that of large-scale industries. Key projects such as artificial intelligence and big data were advanced in an orderly manner, and commercial use of 5G was officially launched, facilitating the rapid development of new forms of business. National online retail sales of physical goods saw a year-on-year increase of 21.6%, outpacing the growth of total retail sales of consumer goods by 13.2 percentage points. There was a rapid increase in new products to meet market demand, with the production of 3D printers, smart watches, service robots, and new-energy vehicles seeing rapid year-on-year increases of 271.4%, 162.9%, 86.5%, and 34.6% respectively.
2. The dividends of high-level opening up are gradually becoming more evident.
Upholding the principles of mutual consultation, joint development, and shared benefits, we continued to advance the Belt and Road Initiative, successfully held the Second Belt and Road Forum for International Cooperation, expedited infrastructure connectivity and industrial capacity cooperation, and expanded economic and trade engagement with Belt and Road countries. In the first half of this year, the value of imports and exports between China and Belt and Road countries increased by 9.7% year-on-year, 5.8 percentage points faster than the growth of the total value of China’s imports and exports. We promulgated the Foreign Investment Law, introduced a new catalog of industries that encourage foreign investment and two negative lists for foreign investment – one for the whole country and the other for pilot free trade zones – and launched major foreign-funded projects in an orderly manner. Against a backdrop of significantly decreased cross-border investment globally, China’s actual use of foreign capital saw a year-on-year increase of 7.2% in RMB terms, within which the actual use of foreign capital in high-tech industries rose by over 40%.
3. The dynamism of microeconomic entities has been strengthened.
Large-scale tax and fee cuts effectively lightened the burden on enterprises, and significantly enhanced microeconomic entities’ sense of gain and capacity to develop. According to a survey, 52.2% of small-scale industrial enterprises received tax relief in the second quarter, up 3 percentage points over the first quarter, and this proportion increased for six consecutive quarters. Thanks to tax and fee cuts, the operational situation for enterprises showed improvement. By the end of June, the debt-to-asset ratio of large-scale industrial enterprises was 57%, down 0.3 percentage points year-on-year. In the first half of this year, the total profit of large-scale industrial enterprises was down 0.9 percentage points year-on-year from the first quarter. Meanwhile, a continuously improving business environment effectively promoted the growth of microeconomic entities. In the first half of this year, there were 19,000 registrations for new enterprises every day across the nation, which translated into new forces for stabilizing employment, increasing incomes, and promoting growth.
The above facts fully prove that the 6.3% economic growth in the first half of this year was of significant value, demonstrating that China’s economy remains stable overall with a positive trend.