China’s GDP growth up 5.5% in first half of this year

The gross domestic product (GDP) in the first half (H1) of 2023 reached RMB 59,303.4 billion, up 5.5 per cent year on year at constant price, or 1.0 percentage point faster than in the first quarter of 2022, data from the National Bureau of Statistics of China (NBS) showed Monday.

According to a report by China Economic Net, the primary industry’s value added increased by 3.7 percent YoY to RMB 3,041.6 billion; the secondary industry’s value added rose by 4.3 per cent YoY to RMB 23,068.2 billion; and the tertiary industry’s value added grew by 6.4 percent YoY to RMB 33,193.7 billion. In terms of quarters, GDP expanded by 4.5 per cent YoY in Q1 and accelerated to a growth rate of 6.3 percent in Q2 with a quarterly increase of 0.8 percent.

China’s economy has returned to its normal trajectory since the beginning of this year, with a strong start in Q1 and continued momentum in Q2. According to Fu Linghui, spokesperson for the National Bureau of Statistics (NBS), China’s overall economic performance improved during H1 of 2021.

According to Fu, a rebound across virus-hit consumption and services sectors has accelerated, with a strengthened role in driving the economic growth, while that of industrial and agricultural sectors remained stable, providing a solid foundation for the overall economy. The 5.5 percent first-half GDP growth is significantly higher than the 3 percent growth rate last year and the average growth rate of 4.5 percent during the last three years, when COVID-19 disrupted economic activities.

The 5.5 percent GDP growth represents a relatively rapid pace within the global context, particularly given the sluggish economic performance of major economies since the start of this year. China’s sustained expansion has provided crucial support for worldwide economic development, as evidenced by recent upward revisions to economic forecasts by leading international institutions - largely attributable to China’s ongoing recovery. During Q1, notable underperformance was observed in key regions such as the US, Eurozone, Japan and Brazil.

The 5.5 percent GDP growth has underscored an improvement and optimization in economic drivers, from last year’s investment and export-driven to consumption and investment-driven this year. In H1 of 2023, the final consumption contributed to over 70 percent of economic growth; the service output accounted for more than 60 percent of the economic growth.

The 5.5 percent GDP growth is driven by innovation and a change in development mode. In the first six months, investment in high-tech industries increased by 12.5 per cent year on year, the value-added output of information transmission, software and IT service sectors expanded 12.9 percent year on year, and online retail sales of physical goods went up 10.8 percent. Meanwhile, the production of solar cells, new-energy automobiles surged by 54.5 percent and 35 percent. respectively. Moreover, China’s energy intensity -- energy consumption per unit of GDP -- decreased 0.4 percent year on year in the January-June period.

The 5.5 percent GDP growth is attributed to expansion of opening up and optimization of trade structure. Against the backdrop of sluggish global economic recovery and a slowdown in global trade and investment, China keeps opening its door wider, promotes trade structure optimization, and strengthens economic and trade exchanges with countries around the world. In H1 of 2023, China’s total goods imports and exports expanded 2.1 percent year on year, with the value of general trade accounting for 65.5 percent of the country’s total. China’s trade in goods with countries along the Belt and Road jumped 9.8 percent year-on-year in the January-June period, and its imports and exports with Latin America and Africa increased by 7 percent and 10.5 percent respectively.

The 5.5 percent GDP growth is led by improved employment and people’s livelihoods. The surveyed urban unemployment rate in China fell to 5.2 percent in June, close to the level of the same period before the COVID-19. Meanwhile, per capita disposable income rose 5.8 percent from the previous year in the H1. Economic recovery has driven up residents’ willingness to consume and promoted an increase in consumer spending. In the first six months, the per capita consumption expenditure of residents nationwide went up 7.6 percent.

The 5.5 percent GDP growth is the achievement of consolidated food and energy security. China secured another bumper summer grain harvest despite the impact of adverse weather. Besides, China has made solid efforts to ensure its energy supply and expand its production capacity. In the January-June period, the growth rate of raw coal, crude oil and natural gas expanded 4.4 percent, 2.1 percent, and 5.4 percent respectively.