Despite drastic changes and uncertainties in many regions around the world, the growth rate of China’s economy for 2018 was 6.5 percent, much higher than the 3.7 percent growth rate of the world economy. IMF predicts that world economic growth in 2019 will not differ much from 2018, and might lower its projection in January. Global challenges including slow global economic growth, U.S. protectionism, changing global trade rules, and especially the new pressures from the Sino-U.S. trade frictions, have done much to rock the boat of China’s stable economic development. China has had to take measures to face the challenges from external uncertainties by maintaining internal stability.
Based on the general impetus of development for 2018, China’s economic structure has continued to be reorganized and modified, raising the quality and efficiency of economic operations. Developments in the service sector continue to stabilize the economy, high-end industries continue to increase, investment structures are changing, and the fundamental role of consumption continues to expand.
In addition to the development of already existing industries, there has also been a rapid increase of new growth points. With the steady headway made in the supply-side structural reform, a new generation of innovative companies are on the rise. During the previous three quarters of 2018, the number of newly registered enterprises exceeded five million, with a daily average increase of more than 18,000. Among industrial enterprises above a designated size, the growth rate of the high technology industries, equipment manufacturing industries, and strategic emerging industries reached 11.8 percent, 8.6 percent, and 8.8 percent respectively. The growth of new business forms was also strong. Online retail sales of physical goods, for example, increased by 27.7 percent.
Economic growth always brings about a rapid expansion in the scale of consumption and consumption’s contributions to national economy. The CPI rose by two percent in the first three quarters of 2018, and consumer prices remained unchanged. The Engel coefficient was 28.5 percent in the first three quarters of 2018, down 0.7 percentage points from the same period of 2017. Service consumption represented 53.6 percent of all consumption in the first three quarters, up 0.2 percentage points from the same period of 2017. The consumption of cosmetics, smart home appliances, and other products that improve people’s quality of life has maintained rapid growth. Automobile sales in general slowed down, while the share of SUV sales has continued to rise.
During the first three quarters of 2018, the consumption by rural residents increased by 12 percent, greatly surpassing that of urbanites and with more expenditures on education, culture, and entertainment. The trend of consumption structure upgrading continued to rise in 2018.
China’s economic growth has also brought about job stabilization and income increment. During the first three quarters of 2018, more than 11 million urban jobs were created, achieving the full-year target one quarter ahead of schedule. At the same time, the government gave people, especially the middle- and low-income people, a big financial bonus. The new Individual Income Tax Law raises the tax exemption threshold to RMB 5,000 per month. This change alone has reduced the proportion of individual income tax payers in urban employment from 44 percent to 15 percent.
In addition, with the roots of filial piety firmly grounded in Chinese culture, China has made great achievements in guaranteeing the happiness of its elderly. In response to China’s increasing aging population challenge, it promotes home-based, community-based, and mutual-assistance old-age care, and continues to improve the service quality of nursing homes.
Improving the quality of life is inseparable from a clean environment. In 2018, China has seen a decrease of emissions of both sulfur dioxide and nitrogen dioxide by three percent, and concentrations of fine particulate matter (PM2.5) have continued to fall in key areas. All this was made possible by transformation of steel and other industries, raising the standards of pollutant emissions, and retrofitting vehicles like diesel trucks that exceeded the emission limits.
During 2018, the river chief system, which requires officials at every level of government to take full responsibility for the protection of rivers and lakes in regions under their jurisdiction, was also established. Meanwhile, the lifestyle of sustainable living promoted by the state is also making for a better environment.
