I. economic overview: maintaining resilience and repairing inequality
Under the "triple pressure", China's economy showed strong resilience in the first quarter, but the downward pressure increased marginally. In the first quarter, the real GDP increased by 4.8% year-on-year, which was in line with market expectations and increased by 0.8pct compared with the fourth quarter of last year. However, the quarter on quarter growth rate decreased by 0.2pct to 1.3% compared with the fourth quarter of last year, and the downward pressure on the economy increased significantly due to the epidemic in March. On the one hand, the impact of the epidemic has led to low consumption on the demand side, disordered supply chain on the production side and rising unemployment. On the other hand, the resumption of overseas work and production will replace China's exports, and the trade boom is expected to decline. At present, the impact of the epidemic on major economic regions such as the Yangtze River Delta and the Pearl River Delta has continued to the second quarter, and may spill over to other regions along the industrial chain. To achieve the annual growth target of 5.5%, the average economic growth rate in the last three quarters needs to reach 5.7%. The difficulty of stabilizing growth has risen sharply, and the policy is expected to be further strengthened.
In March, the pressure on both sides of economic supply and demand was highlighted, and uneven repair was made. The growth rate of production slowed down, and real estate investment and consumption turned to negative growth. However, supported by the steady growth policy, infrastructure and manufacturing investment performed well. The added value of industries above designated size was 5% year-on-year in the current month; The total retail sales of social consumer goods was - 3.5% year-on-year in the same month; Urban fixed asset investment totaled 9.3% year-on-year, including 0.7% year-on-year real estate investment, 10.5% year-on-year full caliber infrastructure investment and 15.6% year-on-year manufacturing investment.
II. Supply: the production momentum is weakening and the employment pressure is rising
In the first quarter, the added value of industries above designated size increased by 6.5% year-on-year, 1.7pct higher than the actual economic growth. The obvious gap between the two reflects the increasing operating difficulties of enterprises below designated size. The growth rate of the upstream mining industry rose by 0.9pct to 10.7%, the year-on-year growth rate of the midstream manufacturing industry fell by 1.1pct to 6.2%, and the growth rate of the downstream electric heating, water combustion, production and supply industry continued to decline by 0.7pct to 6.1%. In terms of industries, high-tech manufacturing and equipment manufacturing increased year-on-year, while related industries such as electrical machinery and equipment, electronic equipment such as computers and special equipment maintained a high growth rate. The growth rate of automobile manufacturing and other transportation equipment manufacturing fell, down 3.2pct and 1.3pct to 4.0% and 2.9% respectively year-on-year.
Under the impact of the epidemic, the year-on-year growth rate of industrial production slowed down in March, and the chain kinetic energy weakened. The year-on-year growth rate of added value of industries above Designated Size in the current month decreased by 2.5pct to 5.0% compared with that from January to February, and the quarter on quarter growth rate was 0.39%, which was weaker than that in the same period of previous years. Affected by the epidemic, the growth rate of automobile industry in Jilin and Shanghai decreased from 1-2% year-on-year to - 1.2%.
In the first quarter, the year-on-year growth rate of the service industry production index fell 1.7pct to 2.5%, significantly lower than the level in the same period before the epidemic and the average level in the fourth quarter of last year. In March, the service industry production index further deteriorated, with a year-on-year growth rate of - 0.9%, an average decrease of 4.2pct compared with the fourth quarter of last year, the first negative growth in nearly two years. Railway transportation, air transportation, accommodation, catering and other contact gathering industries were obviously frustrated.
In this context, China's unemployment rate continues to rise and the employment situation is grim. In March, the national urban survey unemployment rate was 5.8%, up 0.3pct from the previous month and 0.9pct from the end of last year, breaking the upper limit of the government's work target of 5.5%. Among them, the unemployment rate of urban youth aged 16-24 was 16.0%, an increase of 0.7pct over the previous month.
Looking ahead, the recurrence of the epidemic is the main constraint faced by China's production side in the short term. At present, the inflection point of the epidemic in Shanghai has not been clear, and the production of China's industry and service industry may be significantly disturbed in the second quarter. Under the requirement of "stabilizing employment", the policy will strengthen efforts to ensure the normal operation of production and supply chain.
