Global Times: 

Could the speaker talk about how much the three major demands contributed to and drove economic growth in the fourth quarter and throughout 2023? Were there any new changes? And I would also like to know how the paradigm of "dual circulation" of domestic and international markets developed over the past year? Thank you.

Kang Yi: 

Thank you for your questions. Your questions concern two aspects. One concerns the three major demands, and the other is about "dual-circulation." First, I'll answer your first question about the contribution and the driving force of the three major demands. In 2023, China's final consumption expenditure, gross capital formation, and net exports of goods and services drove the economic growth by 4.3 percentage points, 1.5 percentage points, and -0.6 percentage point, respectively, and contributed 82.5%, 28.9%, and -11.4% to the economic growth, respectively. In the fourth quarter, final consumption expenditure, gross capital formation, and net exports of goods and services drove economic growth by 4.2 percentage points, 1.2 percentage points, and -0.2 percentage point and contributed 80%, 23.1%, and -3.1% to the economic growth.

The second question concerns the progress in "dual circulation" of domestic and international markets. It should be said that new progress has been made in building the new development paradigm in 2023. There are three features:

First, the role of domestic circulation as the mainstay has been reinforced. Based on the strategic underpinning of expanding domestic demand, and with the potential of a massive domestic market in China unleashed, domestic circulation has played an increasingly important role in driving economic growth. In 2023, China's total retail sales of consumer goods reached 47.1 trillion yuan, and fixed asset investment stood at 50.3 trillion yuan. Domestic consumption contributed 111.4% to economic growth, an increase of 25.3 percentage points from the previous year. We have been working hard to build a unified national market, open up the blockages in the domestic circulation, and smooth all links of production, distribution, circulation, and consumption, with the flow of factors becoming more active and the linkage between production and sales gradually getting better. In the fourth quarter, the industrial capacity utilization rate was 75.9%, a 0.2 percentage point increase on a year-on-year basis; the sales ratio of industrial enterprises above designated size remained stable at above 97%. The annual commercial freight volume increased by 8.2%, and the commercial passenger volume increased by 66.5% year on year.

Second, the quality and level of international circulation have been further enhanced. Faced with the negative influences of shrinking external demand, China has redoubled efforts to promote the stability, scale, and structure of foreign trade, with positive growth achieved in exports. Compared with other countries, China did better than major export-oriented economies, and the international market share remained generally stable. In 2023, the export volume of goods rose by 0.6% over the previous year, and the proportion of imports and exports of both general trade and private enterprises increased. At the same time, China has also been actively expanding international economic and trade cooperation and enhancing high-quality Belt and Road cooperation. China has become a major trading partner of more than 140 countries and regions, and international circulation has become wider and deeper. In 2023, the total volume of imports and exports between China and BRI partner countries increased by 2.8% over the previous year.

Third, the domestic and international markets have reinforced each other. The advantages of our supersized market have emerged, and expanding domestic demand has boosted imports. In 2023, the import volume of agricultural products, consumer goods, and energy products increased by 5%, 1.2%, and 27.2%, respectively, over the previous year. The advantages of a sound industrial system and stable production capacity have been brought into play. The steady increases in both the volume and quality of exports have also brought about the development of relevant domestic industries, contributing to a full economic recovery. In 2023, China's export volume of goods hit a record high. Among them, exports of mechanical and electrical products grew by 2.9% over the previous year. The export volume of the "new three" products, namely electric passenger vehicles, solar cells, and lithium-ion batteries, also topped the threshold of one trillion yuan for the first time, with an increase of 29.9%.

While positive progress has been made in "dual circulation" of domestic and international markets, we should also be aware that there are still impediments to domestic circulation. The global economy has been sluggish, and global industrial chains and supply chains have undergone profound changes, posing difficulties and challenges to circulation in the global economy. Next, we will take coordinated steps to expand domestic demands and deepen supply-side structural reform, pursue both high-quality development and high-level security, and promote both in-depth reform and high-level opening up to open up key bottlenecks restricting economic cycles and promote the mutual reinforcement between domestic and international circulations. Thank you.