Chinese economy advances with steady growth momentum

*A broad range of key indicators maintained steady expansion, with production and demand on the rise, overall employment remaining stable, and new growth drivers building up.

*Despite the risks and challenges, China's economy still faces more favorable conditions, positioning it well for continued recovery and growth.

*Retail sales, a vital gauge of consumption, reported stellar growth in July, highlighting a broadening recovery in domestic demand amid targeted policy support.

BEIJING -- The Chinese economy has demonstrated resilience with stronger growth momentum in July, navigating through downside risks as more pro-growth policies have kicked in, official data showed Thursday.

Last month, a broad range of key indicators maintained steady expansion, with production and demand on the rise, overall employment remaining stable, and new growth drivers building up, according to the National Bureau of Statistics (NBS).

"The economy was generally stable with sound progress, and high-quality development firmly advanced," said NBS spokesperson Liu Aihua at a press conference. 

She also sounded a note of caution, however, adding that looming external pressures, a lack of effective demand, and the short-term pains in shifting between old and new growth drivers present challenges to sustained economic recovery.

"Despite the risks and challenges, China's economy still faces more favorable conditions, positioning it well for continued recovery and growth," Liu said.

Tourists visit Hongyadong scenic area in Yuzhong district, southwest China's Chongqing, July 8, 2024. [Xinhua/Huang Wei]

BOOMING CONSUMPTION SHINES

Retail sales, a vital gauge of consumption, reported stellar growth in July, highlighting a broadening recovery in domestic demand amid targeted policy support.

Last month, retail sales of consumer goods went up 2.7 percent year on year to nearly 3.78 trillion yuan (about 528.82 billion U.S. dollars), accelerating from the 2-percent growth registered in June, the NBS data showed.

Services consumption stood out, with retail sales of services expanding 7.2 percent from a year ago in the first seven months, according to the NBS.

Services consumption boomed due to strong summer holiday travel, pushing up demand for services related to transportation, tourism, as well as cultural and sports activities, Liu said, citing record-breaking passenger volume during the first seven months of 2024.

This growth was complemented by the thriving service sector, with the service production index rising 4.8 percent year on year in July, with the sub-index on business expectations of the service sector coming in at 56.6, indicating strong optimism.

Contributing to this vigorous growth, approximately 300 billion yuan in ultra-long special treasury bonds to boost large-scale equipment renewals and consumer goods trade-ins has been announced in late July, which gives a vital boost to consumption.

In particular, Liu highlighted the regional efforts to tailor consumption offerings to local strengths, with experiences, such as family trips, sports tourism and film-themed tours, rapidly gaining traction, becoming bright spots in driving consumption growth.

In a recent tone-setting meeting of the Political Bureau of the Communist Party of China Central Committee regarding priorities for the second half of 2024, Chinese policymakers emphasized the need to fully tap the country's super-large market, with a focus on boosting consumption.

Analysts believe that China's renewed commitment to spurring consumption at the high-profile meeting and policy tools such as special bonds and ultra-long special treasury bonds are conducive to better solving the problem of insufficient effective demand at present.

"With policy measures boosting residents' income and increasing their willingness and ability to spend gradually kicking in, the foundation for consumer market recovery will be further consolidated," Liu added.

Yu Qiongtong (1st L), a homestay operator, talks with newly-recruited staff members at his homestay at Dazhai Village of Longsheng County, south China's Guangxi Zhuang Autonomous Region, July 10, 2024. [Xinhua/Cao Yiming]

RESILIENT GROWTH WITHSTANDS SHORT-TERM WOES

Given the recent short-term disruptions, including heavy rain, flooding and extreme heat sweeping across multiple regions, industrial production maintained rapid growth with its structure optimizing, the NBS data showed.

The country's value-added industrial output expanded 5.1 percent year on year in July, with 80 percent of industries and nearly 60 percent of products registering year-on-year increases.

The equipment manufacturing sector contributed 2.4 percentage points to the entire industrial output growth, Liu said, adding that new growth drivers for the manufacturing sector are being strengthened.

"New growth drivers are increasingly fueling economic expansion," Liu noted, citing the 10-percent investment increase in high-tech manufacturing.

The steady advance in high-end, smart and green technologies is expediting the formation of new quality productive forces, adding fresh impetus into the economic growth, she said.

The 60 millionth vehicle of FAW Group as well as the 9 millionth vehicle of FAW Jiefang rolls off the production line in Changchun, northeast China's Jilin Province, July 16, 2024. [Xinhua/Yan Linyun]

Thursday's data also indicated that the average surveyed urban unemployment rate stood at 5.1 percent in the first seven months of this year, pointing to a stable job market.

Liu attributed the sound momentum to an array of measures to expand employment through multiple channels, as well as the government's policy priority on the employment of youth and college graduates.

Looking ahead, China is poised to further unlock its consumption potential as spending-boosting policies gradually take effects, Liu said, adding that as major holidays approach, including the National Day holiday, domestic demand is expected to be further unleashed.

By aligning fiscal policies with monetary policies, a powerful synergy is taking shape to drive economic growth, laying a solid foundation for sustaining positive momentum, she added.  

Video editor: Li Ziwei, Luo Hui and Lin Lin.