In the first half of 2019, faced with complex environment both at home and abroad, under the strong leadership of the Central Committee of the Communist Party of China with comrade Xi Jinping as the core, all regions and departments strictly implemented the decisions and arrangements made by the CPC Central Committee and the State Council, insisted on the general working guideline of making progress while maintaining stability, stuck to the new development philosophy, advanced the high-quality development, focused on the supply-side structural reform, deepened the reform and opening up, strengthened efforts on maintaining stability in areas like employment, financial sector, foreign trade, foreign investment, domestic investment, and market expectation. As a result, the national economy performed within the reasonable range, and sustained the momentum of progress in overall stability.

According to the preliminary estimates, the gross domestic product (GDP) of China was 45,093.3 billion yuan in the first half of 2019, a year-on-year increase of 6.3 percent at comparable prices. The year-on-year GDP growth for the first quarter was 6.4 percent, and 6.2 percent for the second quarter. The value added of the primary industry was 2,320.7 billion yuan, a year-on-year growth of 3.0 percent; the secondary industry was 17,998.4 billion yuan, a year-on-year growth of 5.8 percent; and the tertiary industry was 24,774.3 billion yuan, a year-on-year growth of 7.0 percent.

1. Agricultural Production Was Sound by Embracing Another Bumper Harvest for Summer Grain.

In the first half of 2019, the value added of crop farming grew by 3.9 percent year on year, 0.5 percentage point slower than the first quarter. The overall output of summer grain was 141.74 million tons, an increase of 2.93 million tons over last year, up by 2.1 percent, hitting the highest record as that of 2017. The structure of crop farming was further optimized, as planting area for cotton and soybean increased. In the first half, the output of eggs grew by 3.6 percent year on year, and that of milk grew by 1.7 percent. The output of pork, beef, mutton and poultry was 39.11 million tons, down by 2.1 percent, among which, the output of beef, mutton and poultry grew by 2.4 percent, 1.5 percent and 5.6 percent year on year respectively, while the output of pork went down by 5.5 percent.

2. Industrial Production Was Generally Stable with High-tech Manufacturing Accounting for Larger Share.

In the first half, the year-on-year growth rate of total value added of the industrial enterprises above the designated size was 6.0 percent, 0.5 percentage point slower than first quarter. In June, the year-on-year growth rate of total value added of the industrial enterprises above the designated size was 6.3 percent, 1.3 percentage points faster than that of May, up by 0.68 percent month on month. An analysis by types of ownership showed that the value added of the state holding enterprises went up by 5.0 percent year on year; that of share-holding enterprises up by 7.3 percent; and enterprises funded by foreign investors or investors from Hong Kong, Macao and Taiwan up by 1.4 percent. In terms of sectors, the value added of the mining grew by 3.5 percent year on year, the manufacturing grew by 6.4 percent and the production and supply of electricity, thermal power, gas and water grew by 7.3 percent. The value added of strategic emerging industries grew by 7.7 percent, 1.7 percentage points faster than that of the industrial enterprises above the designated size. The value added of high-tech manufacturing grew by 9.0 percent, 3.0 percentage points faster than that of the industrial enterprises above the designated size, accounting for 13.8 percent of the total value added of the industrial enterprises above the designated size, 0.8 percentage point higher than that of the same period last year. The output of new energy vehicles and solar cells grew by 34.6 percent and 20.1 percent year on year.

In the first five months of 2019, the total profits made by industrial enterprises above the designated size was 2,379.0 billion yuan, down by 2.3 percent year on year, 1.1 percentage points less than that of the first four months. The profits of industrial enterprises above the designated size in May grew by 1.1 percent, while that for April was down by 3.7 percent year on year. The profit rate of the business revenue of industrial enterprises above the designated size was 5.72 percent, 0.2 percentage point higher than that of the first four months in 2019.

3. Service Sector Grew Fast with Modern Service Industries Performing Well.

In the first half, the service sector maintained a good momentum. The value added of information transmission, software and information technology services, that of leasing and business services, that of transport, storage and postal services, and that of financial intermediation grew by 20.6 percent, 7.8 percent, 7.3 percent and 7.3 percent year on year respectively, or 13.6 percentage points, 0.8 percentage point, 0.3 percentage point and 0.3 percentage point faster than that of the tertiary industry. In the first half of 2019, the Index of Services Production increased by 7.3 percent year on year, 0.1 percentage point lower than that of the first quarter; specifically, that for June grew by 7.1 percent, 0.1 percentage point faster than that of May. In June, the Business Activity Index for services was 53.4 percent, continuing to stay above the 50-point mark separating growth from contraction. The Business Activities Expectation Index for services was 60.3 percent, staying at high level.

In the first five months, the business revenue of service enterprises above the designated size increased by 10.1 percent year on year, 0.3 percentage point faster than that of the first four months; specifically, the business revenue of strategic emerging services, high-tech services and technology services demonstrated fast growth, which increased by 12.5 percent, 12.3 percent and 12.0 percent respectively, or 2.4 percentage points, 2.2 percentage points and 1.9 percentage points faster than the growth of the service enterprises above the designated size.

4. Market Sales Demonstrated a Stable and Rising Trend with Higher Growth Rate and Share for Online Retail Sales.

In the first half of 2019, the total retail sales of consumer goods reached 19,521.0 billion yuan, up by 8.4 percent year on year, or 0.1 percentage point faster than that of the first quarter. In June, the total retail sales of consumer goods reached 3,387.8 billion yuan, a year-on-year growth of 9.8 percent, 1.2 percentage points faster than that of the previous month, or up by 0.96 percent month on month. In the first half, analyzed by different areas, the retail sales in urban areas reached 16,692.4 billion yuan, up by 8.3 percent year-on-year, and the retail sales in rural areas stood at 2,828.6 billion yuan, up by 9.1 percent. Grouped by consumption patterns, the income of catering was 2,127.9 billion yuan, up by 9.4 percent; and the retail sales of goods were 17,393.0 billion yuan, up by 8.3 percent. Upgraded consumer goods grew fast. The retail sales of enterprises above the designated size of cosmetics grew by 13.2 percent year on year, 4.8 percentage points faster than that of the total retail sales of consumer goods.

In the first half, the online retail sales reached 4,816.1 billion yuan, a year-on-year growth of 17.8 percent, 2.5 percentage points faster than the first quarter. Specifically, the online retail sales of physical goods were 3,816.5 billion yuan, up by 21.6 percent, accounting for 19.6 percent of the total retail sales of consumer goods, or 1.4 percentage points higher than that of the first quarter.

5. Investment Witnessed Steady Growth and the Investment in High-tech Industries Grew Fast.

In the first half, the investment in fixed assets (excluding rural households) reached 29,910.0 billion yuan, up by 5.8 percent year on year, 0.2 percentage point faster than that of the first five months, or 0.5 percentage point slower than that of the first quarter. Specifically, the private investment reached 18,028.9 billion yuan, up by 5.7 percent. The investment in the primary industry went down by 0.6 percent; the secondary industry went up by 2.9 percent, among which, that in manufacturing went up by 3.0 percent; the tertiary industry went up by 7.4 percent, among which, that in infrastructure was up by 4.1 percent. The investment in high-tech manufacturing industry increased by 10.4 percent, 4.6 percentage points faster than the total investment; the investment in high-tech services went up by 13.5 percent, 7.7 percentage points faster than the total investment. In June, the investment in fixed assets (excluding rural households) grew by 0.44 percent month on month.

In the first half, the total investment in real estate development was 6,160.9 billion yuan, up by 10.9 percent, or 0.9 percentage point slower than that of the first quarter. The floor space of commercial buildings sold reached 757.86 million square meters, down by 1.8 percent year-on-year. The total sales of commercial buildings were 7,069.8 billion yuan, up by 5.6 percent, maintaining the same speed as that of the first quarter.

6. Imports and Exports Showed Slight Growth and the Trade Structure Continued to Optimize.

In the first half, the total value of imports and exports of goods was 14,667.5 billion yuan, a year-on-year increase of 3.9 percent, 0.2 percentage point faster than the first quarter. The total value of exports was 7,952.1 billion yuan, up by 6.1 percent; the total value of imports was 6,715.5 billion yuan, up by 1.4 percent. The trade balance was 1,236.6 billion yuan in surplus, up by 41.6 percent year on year. The trade structure continued to optimize. The import and export of general trade increased by 5.5 percent, accounting for 59.9 percent of the total value of the imports and exports, an increase of 0.9 percentage point compared with the same period last year. The exports of mechanical and electrical products increased by 5.3 percent, accounting for 58.2 percent of the total value of exports. The total value of imports and exports by private enterprises increased by 11.0 percent, accounting for 41.7 percent of the total value, 2.7 percentage points higher than the same period last year. In June, the total value of imports and exports was 2,561.9 billion yuan, a year-on-year increase of 3.2 percent. The total value of exports was 1,453.5 billion yuan, up by 6.1 percent, and the total value of imports was 1,108.3 billion yuan, down by 0.4 percent.

In the first half, the export delivery value of industrial enterprises above the designated size reached 5,836.1 billion yuan, a year-on-year increase of 4.2 percent. In June, the export delivery value of industrial enterprises above the designated size reached 1,055.5 billion yuan, up by 1.9 percent, 1.2 percentage points faster than that of May.

7. Consumer Price Increased Mildly and Producer Prices for Industrial Products Were Generally Stable.

In the first half, the consumer price went up by 2.2 percent year on year, 0.4 percentage point faster than the first quarter. Specifically, the price went up by 2.2 percent both in the urban and rural areas. Grouped by commodity categories, prices for food, tobacco and alcohol went up by 3.9 percent year on year; clothing up by 1.8 percent; housing up by 2.0 percent; articles and services for daily use up by 1.1 percent; transportation and communication down by 1.0 percent; education, culture and recreation up by 2.5 percent; medical services and health care up by 2.6 percent; other articles and services up by 2.2 percent. In terms of food, tobacco and alcohol prices, prices for grain went up by 0.5 percent, pork up by 7.7 percent, fresh vegetables up by 9.2 percent. Core CPI excluding the price of food and energy went up by 1.8 percent year on year, 0.1 percentage point lower than that of the first quarter. In June, the consumer price went up by 2.7 percent year on year, increasing at the same speed as last month, and down by 0.1 percent month on month.

In the first half, the producer prices for industrial products went up by 0.3 percent year on year, 0.1 percentage point faster than the first quarter. In June, the producer prices for industrial products were unchanged compared with the same period last year, down by 0.3 percentage month on month. In the first half, the purchasing prices for industrial producers went up by 0.1 percent year on year, increasing at the same speed as the first quarter. In June, the prices dropped by 0.3 percent year on year and down by 0.1 percent month on month.

8．Employment Was Generally Stable and the Number of Rural Migrant Workers Continued to Increase.

In the first half, the newly increased employed people in urban areas totaled 7.37 million, accounting for 67 percent of the whole-year target. In June, the surveyed unemployment rate in urban areas was 5.1 percent, 0.1 percentage point higher than the previous month. Specifically, the surveyed unemployment rate of population aged from 25 to 59 was 4.6 percent, 0.5 percentage point lower than that of the surveyed unemployment rate in urban areas. The urban surveyed unemployment rate in 31 major cities was 5.0 percent, same as previous month. In June, the employees of enterprises worked averagely 45.7 hours per week. At the end of the second quarter, the number of rural migrant workers reached 182.48 million, an increase of 2.26 million over the same period last year, up by 1.3 percent, and 0.1 percentage point faster than the first quarter.

9. Residents Income Grew Faster than Economic Growth and Urban-Rural Income Ratio Continued to Narrow Down.

In the first half, the nationwide per capita disposable income of residents was 15,294 yuan, a nominal growth of 8.8 percent year on year, 0.1 percentage point faster than that of the first quarter; the real increase was 6.5 percent after deducting price factors, 0.2 percentage point higher than the economic growth. In terms of permanent residence, the per capita disposable income of urban households was 21,342 yuan, a real growth of 5.7 percent. The per capita disposable income of rural households was 7,778 yuan, a real growth of 6.6 percent. The per capita disposable income of urban households was 2.74 times of the rural households, 0.03 less than that of the same period last year. The median of the nationwide per capita disposable income was 13,281 yuan, a nominal increase of 9.0 percent year-on-year.

10. Supply-Side Structural Reform Was Further Advanced and Economic Structure Continued to Optimize.

Gains were consolidated in the work of five priority tasks (cutting overcapacity, reducing inventory, deleveraging, lowering costs and strengthening weak areas). In the second quarter, the capacity utilization rate nationwide was 76.4 percent, 0.5 percentage point higher than the first quarter, 1 percentage point higher than the average rate since 2013. Specifically, the capacity utilization rate of manufacture of non-metallic mineral products, that of smelting and pressing of ferrous metals and that of smelting and pressing of non-ferrous metals was 3.4 percentage points, 1.7 percentage points and 1.7 percentage points higher than that of first quarter. At the end of June, the floor space of commercial buildings for sale reached 501.62 million square meters, a drop of 7.66 million square meters compared with the end of previous month, and down by 8.9 percent over the same period last year. At the end of May, the asset-liability ratio of the industrial enterprises above the designated size was 56.8 percent, 0.6 percentage point less than the same period last year. In the first half, the investment in two weak areas, namely in ecological protection and treatment of environment pollution and in education increased by 48.0 percent and 18.9 percent respectively, or 42.2 percentage points and 13.1 percentage points faster than the total investment.

Efforts were further made to advance the “three critical battles”. By the end of May, the balance of local governments debt was 19,895.3 billion yuan, within the limit approved by the National People’s Congress. Efforts on precision poverty alleviation began to deliver more effects, as per capita disposable income for rural households in impoverished areas maintained fast growth. The work of pollution prevention and control continued to manifest effects. Preliminary estimates showed that in the first half, the share of clean energy consumption such as natural gas, hydropower, nuclear power and wind power in total energy consumption in the first half was 1.6 percentage points higher than that of same period last year. The energy consumption per unit GDP went down by 2.7 percent year on year.

The economic structure continued to optimize. In the first half, the value added of tertiary industry accounted for 54.9 percent of the total GDP, 0.5 percentage point higher than the same period last year, 15.0 percentage points higher than the secondary industry, contributing 60.3 percent to GDP growth, 23.2 percentage points higher than the secondary industry. In terms of the industrial enterprises above the designated size, strategic emerging industries and high-tech industries maintained fast growth. The final consumption expenditure contributed 60.1 percent to GDP growth. Service consumption took up 49.4 percent of households’ final consumption expenditure, 0.6 percentage point higher than the same period last year. A new layout integrating the development of eastern, western, southern and northern regions is forming, as steady progress was made on key regional strategies, such as coordinated development of Beijing-Tianjin-Hebei region, the Yangtze River Economic Belt, the Guangdong-Hong Kong-Macao Greater Bay Area, and the integrated development of the Yangtze River Delta.

Generally speaking, the national economy in the first half performed within the reasonable range and has sustained the momentum of progress in overall stability. However, we should also be aware that the economic conditions are still severe both at home and abroad, the global economic growth is slowing down, the external instabilities and uncertainties are increasing, the unbalanced and inadequate development at home is still acute, and the economy is under new downward pressure. At the next stage, we should take the Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era as the guideline, fully implement the decisions and arrangements made by the CPC Central Committee and the State Council, adhere to the general working guideline of making progress while maintaining stability, focus on the supply-side structural reform, stick to the high-quality development, deepen reform and opening up, improve the business environment, strengthen innovation capacity in key areas, keep all parties fully motivated, intensify efforts on policy implementation in areas like employment, financial sector, foreign trade, foreign investment, domestic investment, and market expectation, so as to boost the stable and healthy economic development.