Press Release

Beijing’s Economy Sees a Good Start in the First Quarter

  Since the start of the year, Beijing Municipality has been embracing the conclusions of the 19th National Congress of the Communist Party of China (CPC) and been guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era. Beijing adheres to the overall work tone of “steady progress” and focuses closely on new development philosophies and the urban strategic positioning for capital. In line with the requirements of promoting high-quality development, the Municipality energetically presses ahead with supply-side structural reform, and works hard to devolve functions, stabilize growth, promote reform, adjust structure, improve people’s well-being, prevent risk, among others. As a result, Beijing’s economy has seen a wonderful start in Q1.

 

  According to preliminary accounting, in 2018 Q1, Beijing’s GDP registered RMB 680.15 billion, increasing by 6.7% over the previous year based on comparable price, with the growth rate largely the same as that of the entire 2017. By industry, the added value of the Primary Industry was RMB 1.53 billion, down by 12.8%; the added value of the Secondary Industry was RMB 119.52 billion, up by 4.5%; and the added value of the Tertiary Industry was RMB 559.1 billion, up by 7.4%.

 

Cumulative GDP growth rates of Beijing since 2016 (%)

 

 

  1. Agricultural restructuring gains speed; agricultural quality and benefits see steady improvements

 

  Beijing continued to advance agricultural restructuring and traditional agriculture continued to shrink. In Q1, the number of marketable fattened stocks of pigs, the number of marketable fattened stocks of poultry, and the production of poultry and eggs declined by 33.8%, 41.3%, and 33.7%, respectively. Meanwhile, urban modern agriculture saw steady improvements in both quality and benefits. The income/mu of facility agriculture was RMB 14,000, up by 9%; agricultural sightseeing gardens achieved a total income of RMB 440 million, up by 5.6%. The ecological functionality of Beijing’s agriculture became more prominent and the output value of forestry production grew by 11.7%.

 

  2. Industrial production levels off and high-end industries lead development

 

  In Q1, the added value of industrial enterprises above designated size in Beijing rose by 5.4% over the previous year, calculated based on comparable price. Specifically, the added value of the hi-tech manufacturing and strategic emerging industries (mutually intersected) grew by 21.9% and 16.1%, respectively. In key sectors, the pharmaceutical manufacturing industry grew by 27%; the computers, communications and other electronic equipment manufacturing industry increased by 20%; the production and supply of electric and heating power industry grew by 15.8%; and the automobile manufacturing industry dropped by 10.2%.

 

Accumulative growth rates of added value in industrial enterprises above designated size since 2016 (%)

 

 

  From January to February, industrial enterprises above designated size earned a total profit of RMB 18.1 billion, increasing by 12.9% over the previous year; the profit margin of main business income was 5.8%, up by 0.3 percentage point over the previous year. The overall labor productivity of industrial enterprises above designated size reached RMB 386,000/person, up by 42,000/person over the previous year.

 

  3. The Tertiary Industry grew steadily and advantaged sectors played a key leading role

 

  In Q1, the added value of the Tertiary Industry increased by 7.4% over the previous year, which was 0.1 percentage point higher than the growth rate of the entire 2017. In specific, advantaged sectors such as finance, information service, and technology service combined contributed 60.5% to economic growth of Beijing. When it comes to added value, the financial sector posted RMB 119.47 billion, up by 5.8%; the information transmission, software and information technology services sector posted RMB 83.71 billion, up by 20.1%; and the scientific research and development and technical services sector posted RMB 75.71 billion, up by 7.5%.

 

Accumulative growth rates of added value in the Tertiary Industry since 2016 (%)

 

 

  As for the circulation field, transportation, storage, and posts grew by 9%, fueled by the transportation sector. Among public service sectors, education grew by 10.6%; health care and social works increased 8.5%; management on water conservancy, environment, and public facilities grew by 8.4%.

 

  4. Investment shrinks and the investment in key sectors grows fast

 

  In Q1, Beijing completed RMB 118.62 billion of total investment in fixed assets, down by 9.7% over the previous year. In specific, infrastructure investment reached RMB 39.7 billion, increasing by 2.2% and accounting for 33.5% (up by 3.9 percentage points over the previous year) of total investment in fixed assets; investment in real estate development reached RMB 53.14 billion, down by 14.3%. By sector, the investment in the Primary Industry reached RMB 2.04 billion, up by 10%; the investment in the Secondary Industry amounted to RMB 7.4 billion, down by 49.4%; the investment in the Tertiary Industry (including real estate development) totaled RMB 109.18 billion, down by 5%. In specific, the investment in information transmission, software and information technology services and in renting and leasing activities and business services grew by 1.8-fold and 13.6%, respectively.

 

Cumulative growth rates of total fixed-asset investment since 2016 (%)

 

 

  As of the end of March, the construction area of commercial housing reached 107.371 million m2, up by 3.1% over the previous year. In specific, the construction area of residential buildings reached 47.058 million m2, up by 5.7%. In Q1, the sold area of commercial housing reached 0.789 million m2, down by 66%. Specifically, the sold area of residential buildings reached 0.542 million m2, declining by 59.6%.

 

  Construction of affordable housing picked up speed. In Q1, affordable housing completed an investment of RMB 17.59 billion, up by 16.2%; construction area reached 43.325 million m2, up by 34.2% and accounting for 40.4% (up by 9.4 percentage points) of the construction area of Beijing’s new commercial housing; the sold area reached 0.195 million m2, accounting for 24.7% of the sold area of Beijing’s new commercial housing, up by 9.1 percentage points over the previous year.

 

  5. Market consumption grows rapidly and service consumption plays a leading role

 

  In Q1, the total market consumption in Beijing hit RMB 588.15 billion, up by 7.6% over the previous year. Specifically, service consumption achieved RMB 322.98 billion, up by 10.1%, accounting for 54.9% of total market consumption and contributing 71.4% to the total consumption growth; total retail sales of consumer goods amounted to RMB 265.17 billion, up by 4.7%.

 

  In total retail sales of consumer goods, the on-line retail volume of wholesaling and retailing enterprises above designated size reached RMB 55.79 billion, up by 22.6% and driving Beijing’s total retail sales by 4.1 percentage points. By consumption pattern, income from retail sales of goods was RMB 237.89 billion, up by 4.2%; income from catering was RMB 27.28 billion, up by 8.7%. By goods category, the retail sales of household appliances and audio-visual equipment as well as stationery and office supplies respectively increased by 34.7% and 10.4%.

 

Cumulative growth rates of total retail sales of consumer goods since 2016 (%)

 

 

  6. Consumer Price Index (CPI) grows steadily and the Producer Price Index (PPI) falls

 

  In Q1, the CPI of Beijing increased by 2.3% over the previous year. In specific, the price of consumer goods hiked by 0.8% and that of services jumped by 4.3%. Among 8 types of goods and service items, the price of 7 types increased while that of the other 1 type dropped. When it comes to price, food, tobacco & alcohol rose by 2.7%; living rose by 3.5%; living supplies and services rose by 1.4%; transportation and communications rose by 0.5%; education, culture, and entertainment rose by 0.9%; medical healthcare rose by 6.5%; other supplies and services rose by 2.2%; while clothing fell by 1.9%. In March, the overall CPI rose by 2.5% over the previous year and fell by 0.7% over the previous month.

 

Monthly CPI rises and falls over the previous year since 2016 (%)

 

 

  In Q1, PPI fell by 0.2% and PPIRM rose by 0.4% over the previous year. In March, PPI dropped by 0.4% over the previous year and fell by 0.3% over the previous month; PPIRM remained unchanged over the previous year and fell by 0.5% over the previous month.

 

Monthly PPI and PPIRM rises and falls over the previous year since 2016 (%)

 

 

  7. Residents’ income increases steadily

 

  In Q1, per capita disposable income of residents in Beijing was RMB 15,767, increasing by 8.3% over the previous year and actually growing 5.9% after deducting price factor. Three of the four incomes increased and the remaining one income fell: transfer net income increased by 13.5%; wage income increased by 8.3%; property net income increased by 5.8%; and operating net income slipped by 11.3%.

 

  On the whole, in Q1, the economy of Beijing witnessed a good start and exhibited a trend of steady, sound growth. Nonetheless, we must be aware that, the macro-economic environment is still complicated; unbalanced, inadequate development still exists; and the supply-side structural reform remains a daunting challenge. Moving forward, we must continue to be guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, responding actively to the conclusions of 19th National Congress of the CPC, the Central Economic Work Conference, as well as the 4th Plenary Session of the 12th Municipal Party Committee, and remaining committed to the overall work tone of “steady progress”. Surrounding the urban strategic positioning for capital, and we must strengthen innovation-driven development and speed up the establishment of a sophisticated economic structure, thus promoting high-quality socio-economic development of Beijing.