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New Achievements in China's Economic and Social Development
2017/12/22

Since the 18th National Congress of the CPC in 2012, China has made great achievements in its economic and social development. During 2013 and 2016, China’s GDP grew at an average annual rate of 7.2%, almost three times the world average. Its contribution to world economic growth amounted to 31.6%, surpassing the combined contributions of the US, the Eurozone, and Japan. In 2016, China’s GDP stood at 74 trillion yuan, or 15.1% of the world economy, accounting for an increase of 3.5 percentage points over 2012. China’s goods trade as a proportion of world total increased 1.1 percentage points. At the end of 2016, China’s foreign exchange reserve exceeded US$3 trillion, maintaining its position as first in the world. China’s high-speed railway lines reached 22,000 kilometers, more than the total length of countries ranked from second to tenth. The output of over 200 industrial products, including steel and automobiles, ranked first in the world.

I. Innovation surged to new heights, making breakthroughs in changing growth drivers.

China placed innovation at the center of its overall national development strategy. To this end, it created new methods and thinking with regards to macro-control; thoroughly implemented the strategy of innovation-driven development; promoted mass entrepreneurship and innovation; deepened the reform of the system for managing science and technology; facilitated the “Internet Plus”; and implemented the “Made in China 2025” strategy. By doing so, China aroused the latent potential for innovation of the entire society, thus increasing the role innovation plays in leading and driving economic and social development.

1. The capacity for scientific and technological innovation increased substantially.

In 2016, 3.465 million domestic and foreign patent applications were accepted, with 1.754 million being granted patent rights – an increase of 68.9% and 39.8% respectively over 2012. In 2016, China ranked 25th in the Global Innovation Index, up 9 places since 2012 to become ranked first among middle-income countries. A great number of landmark scientific and technological advances emerged, taking manned spaceflight, high-speed rail, quantum communications, radio telescope, manned submersible, supercomputer, and large aircraft technologies to be on par with or approach the most advanced levels in the world.

2. Mass entrepreneurship and mass innovation flourished.

The development of 28 national-level entrepreneurship and innovation centers was moved ahead on all fronts, over 4,200 maker-spaces were set up, and national high-tech development zones boasted over 2,000 high-growth enterprises. From 2014 to 2016, 44 million new market entities were registered, among which 13.62 million were enterprises, an annual increase of 30%. In Q1 2017, the number of newly registered entities maintained an average of 14,000 per day.

3. New industries and new forms of business developed rapidly.

The development of strategic emerging industries maintained good momentum. In 2016, the value added of these industries rose by 10.5% over 2015, a growth rate 4.5 percentage points higher than that of industrial enterprises whose annual revenue exceeds 20 million yuan. In Q1 2017, this figure maintained double-digit growth. In the wake of the further rollout of the “National Broadband Internet Agenda,” online shopping grew quickly. In 2016, there were 731 million Internet users, a 29.7% increase over 2012. Between 2015 and 2016, online retail sales grew at an average rate of 28.6% a year, exceeding that of total retail sales of consumer goods by 18.1 percentage points. In Q1 2017, it registered a year-on-year growth of 25.8%.

4. New products and new business models emerged in droves.

In 2016, the output of sports utility vehicles(SUV) increased by 51.8% over 2015 and new energy vehicles increased by 40%. In Q1 2017, the output of industrial robots grew by 55.1% year-on-year, exceeding the growth rate for the whole of 2016 by 24.7 percentage points. The platform, sharing, and collaborative economies, along with other new business models, achieved far-reaching penetration. New business models are in the ascendant, including combined online-offline businesses, cross-border e-commerce, smart home technology, and intelligent communication.

II. Coordinated development progressed steadily, taking structural adjustment and upgrading to a new stage.

All localities and departments stepped up efforts to advance strategic economic restructuring, push supply-side structural reforms, boost industrial structure upgrades, foster conditions that enable people to consume more, and push forward the integrated development of rural and urban areas so as to promote transformation during development and pursue development amidst transformation. China’s economic and social development therefore became more coordinated.

1. Initiatives that scale down overcapacity, cut excess inventory, deleverage, reduce costs, and make up for deficiencies progressed steadily.

In 2016, steel production capacity was cut by more than 65 million tons and coal by over 290 million tons. At the end of 2016, the floor space of unsold commodity housing decreased by 3.2% over the end of 2015, the first drop in many years. The debt-to-asset ratio of enterprises whose annual revenue exceeds 20 million yuan was 55.8%, a year-on-year decrease of 0.4 of a percentage point. Replacing business tax with value-added tax was extended to all sectors, reducing enterprise tax by one trillion yuan. Investment in environmental protection, agriculture, water conservancy, strategic emerging industries, and other weak links increased rapidly. Finally, a number of major initiatives that both address urgent immediate needs and promise long-term benefits were undertaken.

2. Industrial development moved towards the medium-high end.

During 2013 and 2016, the value added of equipment manufacturing and high-tech manufacturing industries grew in real terms at an average annual rate of 9.4% and 11.3%, and exceeded the growth rate of large-scale industries by 1.9 and 3.8 percentage points respectively. The role of the service industry in underpinning economic growth also strengthened. Its value added increased at an average rate of 8% annually, exceeding the GDP growth rate by 0.8 percentage points. In 2016, the proportion of value added by the service sector to GDP grew to 51.6%, an increase of 6.3 percentage points over 2012, contributing half of all economic growth. In Q1 2017, this proportion even rose to 56.5%.

3. Consumption became a major driving force behind economic growth.

During 2013 and 2016, the annual average contribution of final consumption expenditure to GDP was 55%, 8.5 percentage points higher than that of total capital formation, serving as an anchor for economic operations. For each year during this period, its contribution was 47%, 48.8%, 59.7%, and 64.6% respectively. In Q1 2017, its contribution reached 77.2%, showing a steady increase.

4. The coordinated development of rural and urban areas entered a new phase.

A new type of urbanization developed in steady steps. At the end of 2016, the percentage of China’s permanent urban residents reached 57.35%, 4.78 percentage points higher than in 2012. Access to basic public services became more equal and the gap between rural and urban areas continued to narrow. The urban/rural income differential multiplier narrowed by 0.16 in 2016 over 2012. Steady progress was made in the development of the Belt and Road, Beijing-Tianjin-Hebei integration, and the Yangtze River Economic Belt initiatives. The plan to establish Xiongan New Area began, and a number of national and regional key cites developed rapidly, with new growth poles and belts gradually emerging.

III. Green development has taken root in the hearts of the people.

1. Remarkable results were achieved in energy conservation and emissions reduction.

Efficiency improved in the utilization of energy resources. In 2016, energy and water consumption per unit of GDP fell by 17.9% and 23.9% respectively over 2012. In Q1 2017, energy consumption per unit of GDP continued to drop by 3.8% year-on-year. The energy structure continued to optimize. In 2016, consumption of clean energy sources including hydro, wind, nuclear, and natural gas accounted for 19.7% of total energy consumption, an increase of 5.2 percentage points over 2012. The discharge of major pollutants dropped significantly. In 2015, China saw a decline in chemical oxygen demand of 8.3%, and a reduction in emissions of ammonia nitrogen, sulfur dioxide, and nitrogen oxide of 9.3%, 12.2%, and 20.8% respectively over 2012.

2. Greater efforts were made to protect the environment.

Forest coverage continued to expand. In 2016, afforestation covered 21.3% more area than in 2012. The forest coverage rate in 2015 increased by 1.3 percentage points over 2010. In 2016, the area under soil erosion management increased by 24.5% over 2012.

3. The capacity for urban environmental governance was improved.

At the end of 2016, urban sewage treatment plants increased treatment capacity by 26.3% compared with the end of 2012, and the treatment rate of domestic sewage reached 92.4%. The rate of safe disposal of domestic waste reached 95%, an increase of 10.2 percentage points over 2012.

4. Environmental quality improved gradually.

In 2016, among 338 cities that were monitored, the air quality of 24.9% of them met the required standard, an increase of 3.3 percentage points over 2015. The annual average of the mean concentration of PM2.5 in cities at the prefectural level and above that did not meet the required standard was 52mcg/cubic meter, a decline of 8.8% over 2015.

IV. Open development escalated on all fronts.

1. The goods trade shifted from quantity- to quality-based growth.

In 2016, the total volume of imports and exports reached 24.3 trillion yuan, with its proportion in total world trade maintaining the position as global frontrunner. The structure of the goods trade was continually optimized. In 2016, general exports and imports accounted for 55.1% of total volume of exports and imports, an increase of 3.1 percentage points over 2012. Foreign trade saw a return to stability in Q1 2017 following further structural optimization.

2. Trade in services developed at a fast pace.

In 2016, the total volume of service exports and imports was US$804.4 billion, an increase of 70.9% over 2012. With an annual growth rate of 14.3%, China’s trade in services ranked second in the world. The proportion of trade in services in total foreign trade reached 17.9%, an increase of 7.1 percentage points over 2012.

3. Two-way investment increased rapidly.

From 2013 to 2016, China utilized a total of US$489.4 billion of foreign investment, an average increase of 3.1% each year. Non-financial outward direct investment totaled US$491.5 billion, an average increase of 21.6% annually. The Belt and Road Initiative progressed steadily. By the end of 2016, China’s enterprises established 56 cooperation zones in countries along the Belt and Road with a total investment of US$18.6 billion. A number of major projects and international industrial capacity cooperation projects were launched. We also made steady progress with launches of high-speed railway and nuclear power projects abroad.

4. The development of a new economic framework characterized by openness was accelerated.

In October 2016, the RMB was included in the IMF’s Special Drawing Rights currency basket, which marked a major step towards the internationalization of the Chinese currency. Efforts were made towards improving the business environment to make it more law-based, internationally-oriented, and facilitative. Pre-establishment national treatment was afforded to all foreign investors on the basis of a negative list. Free trade zones developed steadily, including 11 pilot free trade zones, and 12 integrated experimental zones for cross-border e-commerce set up in Shanghai, Guangdong, and Tianjin. In 2016, the volume of retail imports and exports of cross-border e-commerce increased by 38.7% over 2015, and the imports and exports volume in integrated experimental zones doubled.

V. Shared development brought benefits to all people.

China is already ranked as one of the world’s medium-high economies, and its people’s demands are becoming more diverse. In this context, regardless of whether we are to enhance growth drivers to avoid the middle-income trap, or strengthen unity among the people to ensure social harmony and stability, it is imperative to share the fruits of development with the people so they may really enjoy its benefits. China has used every means at its disposal to increase employment, campaign against poverty, provide more public services, and improve social security systems so as to ensure the fruits of development benefit all people.

1. Employment rose steadily.

An active employment policy was launched and innovation brought with it more jobs. During 2013 and 2016, over 13 million urban jobs were created per annum, while a survey of 31 major cities and towns put the unemployment rate at 5%. The number of rural migrant workers increased by an average rate of 1.8% per year, and in Q1 2017, 3.34 million urban jobs were created, 160,000 more than Q1 2016.

2. Living standards improved constantly.

In 2016, per capita disposable income was 23,821 yuan, 7,311 more than in 2012, an average growth rate of 7.4% per year in real terms. In Q1 2017, personal income increased by 7%, exceeding the growth rate of GDP by 0.1 of a percentage point. Consumption also saw a rapid qualitative increase. In 2016, the Engel’s coefficient was 30.1%, a decline of 2.9 percentage points over 2012, with wealth levels in the top 20% to 30% as defined by the UN. Spending on transportation and communication, education, culture and entertainment, and health care as a proportion of total consumption increased by 2, 0.7, and 1.3 percentage points respectively over 2012.

3. Targeted poverty alleviation measures yielded remarkable results.

According to the rural poverty line set at 2,300 yuan per capita per year, calculated in constant 2010 prices, the poor population in 2016 totaled 43.35 million, 55.64 million less than in 2012. The poverty rate declined to 4.5%, 5.7 percentage points lower than in 2012. Rural incomes in poor areas grew faster than the national level. Between 2013 and 2016, per capita disposable income of rural residents in poor areas grew at an average rate of 10.7% per year in real terms, exceeding the national rural growth rate by 2.7 percentage points.

4. The social security system improved further.

Compared with the end of 2012, 99.13 million more people were covered by basic pension scheme, 211.98 million more by basic medical care in urban areas, 28.64 million more by unemployment insurance, 28.77 million more by work injury insurance, and 30.14 million more by maternity insurance by the end of 2016. A social security system that covered rural and urban areas was mostly finalized. The integration of medical insurance schemes for rural and non-working urban residents made substantial progress. In 2015, the proportion of health care expenses borne by individuals dropped to 29.3%. The basic medical insurance scheme offered coverage to the whole population.

5. Education, culture, and health care developed rapidly.

People’s education levels continually increased. The average length of schooling for people aged 15 and above increased from 9.05 years in 2010 to 9.42 years in 2015. The cultural industry also witnessed robust development. In 2016, the value added of cultural and related industries grew by 67.4% over 2012. The value created by these industries as a proportion of GDP was 4%, exceeding 0.59 percentage points over 2012. Medical and health care improved further. Life expectancy of the population rose to 76.34 in 2015 from 74.83 in 2010, the infant mortality rate decreased from 10.3‰ to 8.1‰, and the maternal mortality rate fell from 0.245‰ to 0.201‰.

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