China’s GDP grew 5 percent year on year to some 61.68 trillion yuan ($8.5 trillion) in the first half (H1) of this year, the National Bureau of Statistics (NBS) announced on July 15.
According to the NBS, the Chinese economy improved in H1 courtesy of supporting government policies, rebounding demand and evolving economic driving forces.
GDP is a good indicator of economic growth as it gauges a country’s economic size and health by tracking the value of all goods and services produced over a specific period.
The bureau said that China’s GDP expanded 5.3 percent and 4.7 percent year on year in the first and second quarters (Q1 and Q2) of 2024, respectively, attributing the slower economic growth in Q2 to short-term factors such as extreme weather and floods.
Resilient growth
Consumption continued to play a major role in the country’s economic growth, with final consumption contributing to 60.5 percent of said growth in H1.
Chinese car brands demonstrated improved performances both domestically and internationally during H1. Data from the China Association of Automobile Manufacturers (CAAM) indicated that vehicle production in China reached approximately 13.89 million units, a 4.9-percent increase from last year. Meanwhile, vehicle sales totaled 14.05 million units, marking a 6.1-percent year-on-year growth.
As of late June, the share of Chinese passenger car brands in the domestic market exceeded 60 percent. China exported around 2.79 million units of vehicles in H1, up 30.5 percent year on year, the CAAM said.
In the fourth quarter of 2023, Chinese carmaker BYD became the world’s leading seller of pure electric vehicles. According to the company, it sold over 200,000 electric vehicles overseas in H1, surging by 151 percent year on year.
The tourism sector continued to heat up. China saw about 295 million domestic tourist trips during the five-day May Day holiday, which ran from May 1 to 5 this year, up 7.6 percent year on year and 28.2 percent from the corresponding period in 2019, according to the Ministry of Culture and Tourism.
China State Railway Group Co. Ltd. said that domestic railway passenger trips hit a record high of about 2.1 billion in H1, up 18.4 percent year on year.
Smaller counties in particular became popular destinations for Chinese tourists, with Anji in Huzhou City, Zhejiang Province, emerging as a standout. Known for its natural scenery, coffee culture and more than 300 cafés, Anji, which has a population of 600,000, attracted over 700,000 tourists in H1.
One prime example is the Deep Blue Café in Hongmiao Village. The café, which opened in 2022, sold around 8,000 cups of coffee on Qingming Festival (April 4) this year, the highest daily sales recorded among cafés nationwide.
“Deep Blue Café received a maximum of over 20,000 consumers a day during holiday periods in H1,” Cheng Shuoqin, Deep Blue’s founder, told Beijing Review. The popular hangout sits next to a small lake, originally an abandoned pit that has been transformed into a bonafide scenic spot. The lake’s water, tinted a gem-like blue due to mineral deposits, has made the place a popular tourist destination.
“China Travel” has become a buzzword on international social media and video platforms like YouTube. Inbound trips to the country increased as China has continuously introduced favorable visa policies since late 2023.
In H1, about 8.54 million international travelers visited China visa-free, a year-on-year growth of 190.1 percent, the National Immigration Administration said, adding it expects a continued growth of inbound travel in the second half (H2) of this year.
Industrial upgrading
In H1, the manufacturing sector grew 5.8 percent year on year, while the services sector experienced a growth of 4.6 percent.
According to the NBS, investment in hi-tech manufacturing and services increased 10.1 percent and 11.7 percent, respectively.
Leveraging new technologies, Chinese companies have advanced up the industrial chain. One example is that of Midea Group, a leading home appliance manufacturer, which has established the largest dishwasher production facility in Asia in Foshan City, Guangdong Province, a key manufacturing center in south China.
Since its launch in 2000, the factory has had an annual output of 6 million units, exporting products to 145 countries and regions.
“Here, a brand-new dishwasher rolls off the production line in just seconds,” Xiong Tao, the factory’s chief digitalization engineer, told Beijing Review.
According to Xiong, the factory has adopted automated guided vehicles and unmanned forklifts for smart production, reducing costs for each dishwasher by 24 percent and shortening delivery time by 41 percent. It also uses big data and artificial intelligence (AI) to empower production.
AI and robotics companies saw strong momentum in China. According to the Ministry of Industry and Information Technology, the country had over 460,000 hi-tech enterprises as of H1 this year, including over 4,500 AI firms.
Founded in 2018, WISENSE is a robotics company based in Shandong Province, east China. The company specializes in developing humanoid and canine-shaped robots designed for applications such as patrolling electrical systems and logistics. WISENSE also operates a subsidiary in Beijing.
“The four-legged robots equipped with AI technology and sensors can walk on slopes and stairs, while adjusting themselves to keep balanced,” Lu Dujun, the company’s tech director, told Beijing Review.
WISENSE has also developed remote-controlled forklift robots. Utilizing a 5G-enabled device from Beijing, an operator can command a robot in Shandong—400 km away—to transport goods. The transmission of commands takes just 0.1 second, according to Lu.
Jumping hurdles
China’s surveyed urban unemployment rate stood at 5.1 percent in H1, down 0.2 percentage points from the same period last year. Per-capita disposable income stood at 20,733 yuan ($2,857) in the first six months, up 5.4 percent year on year, the NBS said.
Observers did highlight that China continues to face challenges. For instance, the 3.7-percent year-on-year growth in total retail sales of consumer goods in H1 was 1 percentage point lower than in Q1, which, according to Wen Bin, chief economist at China Minsheng Bank, indicates a slowdown in consumption growth due to weak consumer expectations.
Also, per-capita disposable income growth in H1 fell by 0.8 percentage points compared to Q1. Additionally, personal income tax revenue for January through May decreased by 6 percent, a steeper decline than the 1.5-percent drop observed in the same period in 2023.
To ensure that over 11 million new college graduates, a historic high, across China get jobs this year, the country’s economic growth for 2024 should be at least 5 percent, Wen said.
According to the General Administration of Customs, China’s foreign trade reached new heights in H1. Total goods trade volume expanded 6.1 percent year on year to 21.17 trillion yuan ($2.9 trillion) in H1, with exports growing 6.9 percent and imports increasing 5.2 percent year on year over the period.
“In H1, China’s exports saw better-than-expected performances with a rebounding global economy. With mounting uncertainty in the global landscape, domestic demands remain to be further boosted,” Wen told Beijing Review.
China’s exports in H2 may slow down compared with H1. To boost the economic drivers, the Chinese Government needs to further shore up consumption and investment in infrastructure in H2, Wen said. –The Daily Mail-Beijing Review news exchange item
