Why did China's economy outperform expectations in the first half of the year? Here's the answer.

On July 15, the National Bureau of Statistics released the economic data for the first half of the year. The GDP reached 6,605.36 billion yuan, a year-on-year increase of 5.3%. Consumption was the main driving force for growth, contributing 52%. Inbound tourism heated up, and holiday consumption increased significantly. The added value of high-tech manufacturing industries grew by 9.5%, and the output of new energy vehicles, industrial robots and other products increased at a high speed. In the first half of the year, the scale of China's foreign trade exports exceeded 13 trillion yuan, and exports to emerging markets such as ASEAN and Latin America were strong. Cross-border e-commerce became the "dark horse" in exports and is expected to continue to grow rapidly in the next five years.

On July 15, the National Bureau of Statistics released the national economic data for the first half of the year. According to preliminary estimates, the GDP in the first half of the year was 6,605.36 billion yuan, a year-on-year increase of 5.3% at constant prices.

Not only the GDP, but also the data of consumption, exports and economic indicators related to high-quality development in the first half of the year were very eye-catching. What secrets are hidden behind the economic development situation exceeding the expectations of most market institutions?

The reporter of National Business Daily (hereinafter referred to as the reporter) found through sorting out that the answer lies in three sets of data:

Firstly, in terms of consumption, consumption was the main driving force for GDP growth. In the first half of the year, the final consumption expenditure contributed 52% to economic growth.

Secondly, in terms of foreign trade, in the first half of the year, the scale of China's foreign trade exports exceeded 13 trillion yuan for the first time in the same period in history, and the number of foreign trade enterprises with actual import and export performance reached 628,000.

Thirdly, in terms of industrial transformation, in the first half of the year, the added value of high-tech manufacturing industries above designated size increased by 9.5%. The output of 3D printing equipment, new energy vehicles and industrial robots increased by 43.1%, 36.2% and 35.6% respectively year-on-year.

The reporter learned in the interview that the above three aspects are precisely the key forces driving the "troika" (consumption, exports and investment) forward rapidly at present, and also important engines for economic development.

Consumption Boosts: The Total Retail Sales of Consumer Goods Exceeded 24 Trillion Yuan in the First Half of the Year

Sheng Laiyun, the deputy director of the National Bureau of Statistics, said at a press conference held by the State Council Information Office on July 15 that in the first half of the year, the year-on-year growth of the total retail sales of consumer goods accelerated, and market activity increased, which strongly supported the GDP growth in the first half of the year. In the first half of the year, the total retail sales of consumer goods reached 24.55 trillion yuan, a year-on-year increase of 5%. Among them, the growth in the second quarter was 5.4%, 0.8 percentage points faster than that in the first quarter, showing a quarterly increase.

The reporter noticed that in addition to the upgraded consumption brought about by the "trade-in" program, the consumption related to culture and tourism in the first half of the year was outstanding.

In the first half of the year, inbound tourism continued to heat up. During the May Day and Dragon Boat Festival holidays, the number of foreign visitors entering China under the visa-free policy increased by 72.7% and 59.4% respectively year-on-year. The consumption of cultural and sports leisure and transportation services related to holiday consumption maintained double-digit growth. The retail sales of sports and entertainment products of units above designated size increased by 22.2% year-on-year.

Liu Yuanchun, the president of Shanghai University of Finance and Economics, said in a telephone interview with the reporter that at present, China's per capita GDP has exceeded $13,000, and it is at a critical point when the consumption structure of residents is shifting from subsistence consumption to improvement consumption. At this stage, China's consumption of cultural services is still about 10 percentage points lower than the world average, indicating great room for improvement.

Liu Yuanchun believes that the reasons for the above gap include both the constraints on residents' income and the lack of high-quality supply. It is worth noting that although residents' travel has returned to normal after the epidemic, the intensity of service consumption has not returned to the pre-epidemic level and is still in the recovery stage. Therefore, promoting service consumption to reach the established level should be the current focus of work. All localities can carry out subsidies and policy support for cultural and tourism consumption based on the prominent characteristics of domestic cultural and tourism demand. He emphasized that the cultural and tourism economy will become one of the core growth points for the expansion of China's consumption demand in the future.

Strong Exports: The Scale of Foreign Trade Exports Exceeded 13 Trillion Yuan for the First Time in the Same Period in History

In the first half of the year, the scale of China's foreign trade exports exceeded 13 trillion yuan for the first time in the same period in history. In the second quarter, imports and exports increased by 4.5% year-on-year, 3.2 percentage points faster than that in the first quarter, and maintained year-on-year growth for seven consecutive quarters.

Wei Jianguo, the former vice minister of the Ministry of Commerce, said in a telephone interview with the reporter that in the first half of the year, China's exports to emerging markets such as ASEAN, Latin America and Africa showed a strong growth trend. For example, in the first half of the year, exports to ASEAN increased by 14.3% year-on-year, and exports to Africa increased by 23% year-on-year, far higher than the overall growth rate of China's exports.

He said that cross-border e-commerce has become the "dark horse" in exports in the first half of this year. At present, the number of cross-border e-commerce entities in China has exceeded 120,000, and traditional foreign trade enterprises are accelerating their transformation to cross-border e-commerce. Cross-border e-commerce has become a new type of "integration" of production enterprises and foreign trade enterprises. According to the global top cross-border e-commerce rankings, in addition to Amazon, China's TikTok and Alibaba have become global leading cross-border e-commerce platforms.

Wei Jianguo believes that the strong supply chain control ability, new marketing methods and flexible business models will bring thousands of Chinese small and medium-sized enterprises and manufacturers to the "big stage" of the international market. In 2024, the scale of China's cross-border e-commerce imports and exports reached 2.71 trillion yuan, a year-on-year increase of 14%. Among them, exports were about 2.15 trillion yuan, a year-on-year increase of 16.9%, far higher than the export growth rate of traditional goods trade.

Wei Jianguo expects that in the next five years, the cross-border e-commerce industry in China will continue to maintain a rapid growth trend, and more cross-border e-commerce brands from China will emerge in the global market.

Effective Industrial Transformation: High-speed Growth in the Output of New Energy Vehicles, Industrial Robots, etc.

Statistics show that in the first half of the year, the related industries led by high-tech manufacturing continued to maintain high-speed growth - the added value of high-tech manufacturing industries above designated size increased by 9.5%, the export of high-end equipment increased by more than 20%, the output of 3D printing equipment, new energy vehicles and industrial robots increased by 43.1%, 36.2% and 35.6% respectively year-on-year, the output of lithium batteries increased by 53.3%, and the added value of the core industries of the digital economy accounted for about 10% of the GDP - all these became relatively prominent highlights in the economic operation in the first half of the year.

Wei Jianguo said in a telephone interview with the reporter that the core driving force for the rapid growth of China's equipment manufacturing exports is China's continuous efforts in industrial technological upgrading, and it is also inseparable from the impact of the global industrial chain restructuring.

He said that in the field of equipment manufacturing, the global production chain has shown a trend of moving eastward, including capital, technology, talent and equipment. With the increasing demand for automation equipment and construction machinery in emerging markets such as Southeast Asia and the Middle East, this will further promote the recovery of China's manufacturing industry. For example, in the first half of the year, the export of Chinese industrial robots increased by 61.5%, and the export growth rates of lithium batteries and wind turbines exceeded 20%. The position of China's equipment and manufacturing industries in the global supply chain has been greatly improved.

How to transform the new quality productivity into a continuous growth point for the consumer economy?

Liu Yuanchun believes that the key lies in whether innovative enterprises can achieve sustainable profitability. If enterprises' investments result in long-term losses, both residents' income and government finance will be damaged, which will inevitably lead to the shrinkage of the cycle. Therefore, while boosting the demand side, supply-side reform must be promoted simultaneously to ensure the profitability of innovative enterprises at the micro and macro levels, and finally form a virtuous cycle of "enterprise profitability - residents' income increase - fiscal stability".

This article is from the WeChat official account "Headlines of National Business Daily". The author is Zhang Hong. It is published by 36Kr with authorization.