China's economy starts off 2024 on strong footing, with an array of key indicators in the first two months beating market expectation by a wide margin, fueled by a spending spree in the Spring Festival holidays, ramped-up efforts in building new quality productive forces and the effects of macro policies implementation. Observers said the upbeat data offer an encouraging sign that the world's second-largest economy is not only consolidating the recovery momentum but also picking up pace.

The industrial output grew 7 percent year-on-year in the first two months, according to data released by the National Bureau of Statistics (NBS) on Monday, well above the 5 percent forecast from analysts polled by Reuters. It is also the fastest since March 2023.

The strong start in 2024, which presages a raft of bright spots ranging from high-tech to consumption of this year's growth path, also rebuts squarely recent skepticism and badmouths on Chinese economy hyped by certain Western media. It projects great confidence in China's economic trajectory toward a growth rate of around 5 percent in 2024, a goal set by this year's Government Work Report that Chinese officials believe - albeit faced with external and internal headwinds - will come to fruition "with earnest endeavors."

In January-February period, retail sales expanded 5.5 percent from the same period last year, versus a Reuters forecast of 5.2 percent, while fixed-asset investment also gained 4.2 percent in year-on-year terms, surpassing market estimates of 3.2 percent.

"With the macro policies taking effect, China's national economy has continued to recover and turn for the better in the first two months," NBS spokesperson Liu Aihua said at a press briefing of the State Council Information Office on Monday.

Recovery momentum

"The positive macro-economic indicators reflect that the country's GDP growth rate in the first quarter of this year will be higher than 5 percent, and that the economy is bottoming out after facing constant growth pressure seen in the past 10 years or so," Cao Heping, an economist at Peking University, told the Global Times on Monday.

For the first time in a number of consecutive months, the overall gauges on industrial, service and investment all topped the forecasts and displayed a considerable level of gains. And those headline indexes point to a strengthening recovery momentum that is buoyed by restorative growth and, more importantly, multiple new positive factors beyond, according to analysts.

For example, the 5.5-percent jump in the retail sales in the first two months, which though seem to be a moderate number taking account of last year's high base effect, shed light on the indigenous vigor and potential of China's massive consumer market, particularly in entertainment, tourism, cultural, sports and vehicle categories.

During the eight-day Spring Festival holidays in February, nationwide domestic tourism reached 474 million trips, an increase of 19 percent compared with pre-COVID level in 2019, while total expenditure amounted to 632.7 billion yuan, up 7.7 percent from the same holiday period in 2019.

It is forecasted the spending boost will prevail throughout the year, as more stimulus policies take effect and the "pandemic-scarring effect" continues to diminish. China last week unveiled a plan to promote large-scale renewal of equipment and the trading-in of consumer goods, opening up a market worth trillions of yuan and further giving consumption a leg up.

Tian Yun, a veteran economist based in Beijing, told the Global Times on Monday the economic recovery has also shown signs of tilting toward a more "even and balance" mode at the beginning of the year, especially in the demand side, whose recovery - though still lags behind the supply side - has been in a quick catch-up.

Fixed-asset investment, which grew 4.2-percent in the first two months, has "bottomed out" despite a drag by property sector, according to Tian, while ascribing the turnaround partly to the issuance of additional 1-trillion-yuan special treasury bonds in the fourth quarter.

In January-February period, investment in high-tech industries rose 9.4 percent year-on-year, a drastic rise that aligns with this year's economic blueprint laid out during the two sessions, which put the development of new quality productive forces as a core mission.

To reinforce and fast track the recovery in the demand side, Tian suggested that Chinese policymakers to "frontload" part of special-purpose bonds in the first half of 2024.

The Government Work Report stated that China plans to issue ultra-long special treasury bonds starting this year and over each of the next several years. One trillion yuan ($139 billion) of such bonds will be issued in 2024.

In 2023, fixed-asset investment staged a growth of 3 percent, NBS data showed.

In terms of supply, Liu Aihua said at the press briefing that industrial production will continue to play a ballast role in the national economy. She highlighted new drives from China's elevating innovation capacity amid manufacturing upgrade and transformation, in addition to traditional edges such as a complete industrial chain as well as the sheer size of the market.

Confidence behind the target

Following the set-up of an annual GDP growth target in early March, Chinese doomsayers have been gone to great lengths to raise doubts on the likelihood of the country to achieve a 5-percent goal. So the highly-anticipated economic data at the start of the year also timely draws out an objective and comprehensive picture on China's economic course, proving that the country is running on abundant engines - which certain Western media outlets ignore, that arguably outweigh unfavorable conditions, analysts said.

While acknowledging a bunch of downward pressures including "complex, severe and uncertain external environment and insufficient domestic effective demand," Liu stressed that China has conditions and enough support to hit the around 5-percent GDP growth target, and will realize the goal "through earnest endeavors."

Liu said Chinese authorities attach great importance to the challenges that could pose barriers to development. They also stand with great confidence and maintain strategic focus to cope with difficulties, promote sustained economic recovery, and translate the expected economic development goals into reality.

Han Baojiang, a professor at Party School of the Central Committee of the Communist Party of China, told the Global Times that Chinese policymakers are sober and they have articulated clear approach to economic development. "As long as we improve our economy, enhance people's livelihoods, and ensure employment, it is probably the most effective way to deal with all challenges."

Cao also voiced full confidence that the country will realize this year's GDP growth target of around 5 percent, though he said more effort is needed to focus on high-quality development.

To shield against potential headwinds, Cao suggested that authorities should continue to promote the transition in overall economic structure, focus on developing new quality productive forces, like new industries to be propelled by artificial intelligence.

Analysts warned against the property downturn, which they said is likely to persist for some time this year. In the first two months, China's property investment dived 9 percent year-on-year, NBS data showed.

Also, the increasingly volatile external environment calls for Chinese policymakers to reach more into the toolbox to stabilize and shore up internal demand, according to Tian. Liu said the country's solid economic fundamentals, the accumulation of many positive factors and the government's stimulus measures will continue to propel the economy to rebound and improve.

Tian predicted that China will continue making an "immense" 30 percent contribution to the world economy on condition that the 5-percent GDP growth goal is achieved, making it the second-largest only after the US.

The China-Laos Railway has facilitated over 30 million passenger trips since its operation in December of 2021, official data showed on Thursday, highlighting China's deepening cooperation with the neighboring countries under BRI.

As of Tuesday, the railway had transported a total of 30.2 million passenger trips and 34.24 million tons of cargo, with cross-border shipments exceeding 7.8 million tons, according to China Railway. This robust performance is showing a thriving trend in both passenger and freight transport along this strategic route.

The China-Laos Railway is experiencing a continuous rise in passenger volume. In the Chinese section, daily passenger trains have increased from 35 to 51, with daily passenger traffic peaking at 103,000 from the initial 20,000, China Railway said.

The Laotian section also expanded its daily passenger trains from four to 12, with daily passenger throughput peaking at 12,808 from the previous 720.

Travelling with the China-Laos Railway is a wonderful and exciting experience, as the railway now offers multi-language services and cost-effective tickets, and it has greatly facilitated our travel, a tourist surnamed Kong, told the Global Times on Thursday.

During this year's Spring Festival travel season, tourism along the China-Laos Railway has boomed. The total number of passengers transported along the entire line reached 2.96 million, representing a year-on-year growth of 39 percent.

The China-Laos Railway shows strong and steady growth in cross-border freight transportation. From January 1 to March 12 this year, the railway completed cross-border freight transportation of 1.064 million tons, a year-on-year increase of 33.9 percent.

China welcomes a move by Hungary to facilitate visa for Chinese citizens visiting the country for investment and cooperation purposes, and welcomes visa facilitation by more countries, a spokesperson of China's Foreign Ministry (FM) said on Tuesday.

The announcement by Hungary related to issuing 5-year, multiple-entry visas for Chinese citizens on business trips is another example of the high-level development of China-Hungary ties, and China welcomes the move," Foreign Ministry spokesperson Wang Wenbin told a routine press conference on Tuesday in Beijing.

Wang noted that bilateral cooperation have yielded fruitful results under the China-Hungary comprehensive strategic partnership.

After China implemented a pilot policy which include visa-free entry for Hungarian tourists and business people, Hungarian Minister of Foreign Affairs and Trade Peter Szijjarto recently announced that Hungary would issue long-term visas to Chinese citizens visiting the country for investment and business cooperation.

"We believe these new measures will further strengthen people-to-people exchanges, deepen mutually beneficial cooperation in various fields, and promote high-level development of the bilateral ties," Wang said. "China also welcomes more countries to offer visa facilitation for Chinese citizens to boost cross-border travel and cooperation."

China announced last week that it will adopt a visa-free policy for Switzerland, Ireland, Hungary, Austria, Belgium and Luxembourg on a trial basis, starting on March 14.

This followed visa-free entry trial for ordinary passport holders from France, Germany, Italy, the Netherlands, Spain and Malaysia, effective from December 1, 2023.

As human society steps into the era of artificial intelligence, it is believed that with intensified and collective efforts, China will carve out a technological path that aligns with its national conditions, enable the safe development of General Artificial Intelligence (AI) and benefit the whole humankind, a Chinese national political advisor said during the two sessions.

General AI has emerged as the strategic high ground in global technological competition. “To win this crucial technological race, which is of paramount importance to our nation, the key lies in nurturing the talent,” Zhu Songchun, director of the Beijing Institute for General Artificial Intelligence and a member of the National Committee of the Chinese People's Political Consultative Conference (CPPCC), said at a group interview held by the second session of the 14th CPPCC National Committee on Sunday.

General AI stands as a typical representative of the new quality productive forces. The “general” in General AI refers to AI’s ability to perform an infinite number of tasks in daily physical and social scenarios, autonomously discover tasks as if it has a “mind of its own,” and possess autonomous value-driven motivation, Zhu said.

Zhu introduced “Tongtong,” the world’s first prototype of a general intelligent humanoid robot being showcased in Beijing. “She has the complete neural and value system of a three or four-year-old child and is currently undergoing rapid iterations. In the future, she will be integrated into various aspects of our lives, such as pouring tea and providing warm companionship,” he said.

Behind the most ordinary abilities in daily life are actually the core technical issues that General Artificial Intelligence needs to research, Zhu said, emphasizing that achieving General AI hinges on giving machines a “mind of their own.”

During this year’s two sessions, AI has emerged as one of the hottest topics. The annual Government Work Report released on Tuesday also highlighted that a stream of innovations emerged in frontier areas such as AI and quantum technology in 2023.

While for major tasks in 2024, the Government Work Report stressed to step up research and development and application of big data and AI, launch an AI Plus initiative, and build digital industry clusters with international competitiveness.

China’s AI industry has entered a period of rapid development. According to data released by the China Academy of Information and Communications Technology, the core AI industry in China reached a scale of 508 billion yuan ($70.69 billion) in 2022, an increase of 18 percent year-on-year. Preliminary statistics indicate that the scale reached 578.4 billion yuan in 2023, with a growth rate of 13.9 percent.

China's integrated circuits (IC) or semiconductor chips export surged by nearly 30 percent in the first two months of 2024 amid the country's efforts to climb up the global technological ladder, despite mounting assaults by the US and its allies to slow down China's technology rise. 

IC exports reached 160.71 billion yuan ($22.33 billion) during the first two months of 2024, with an annual increase of 28.6 percent, data from the General Administration of Customs showed on Thursday. 

IC exports were among a number of high-tech products that have experienced robust growth during the January-February period. 

Beside IC, the exports of automatic data processing equipment increased by 7.3 percent year-on-year to reach 195.45 billion yuan and auto exports soared by 15.8 percent from the same period last year to reach 111.89 billion yuan. 

The robust growth of high-tech products reflect that China's efforts in transforming and upgrading its industries is paying off , and the tech suppression by a number of Western countries have largely failed and have actually boosted China's tech competitiveness as the country put more efforts in achieving self-sufficiency in high-tech products such as chips, analysts said. 

China's chip self-sufficiency rate may increase to 30-35 percent as many domestic chipmakers have expanded manufacturing since the US launched its tech war against China several years ago, said Xiang Ligang, director-general of the Beijing-based Information Consumption Alliance.

Zheng Shanjie, head of the National Development and Reform Commission, the country's top economic planner, said at a press conference held during the ongoing two sessions that China's economy was off to a good start in the first quarter this year, with preliminary economic indicators such as electricity use, exports, and bank loans pointing to a strong recovery of the economy.

Foreign companies still have confidence in China, a view boosted by the release of the Government Work Report on Tuesday, which said China will ramp up efforts to attract foreign investors, including further shortening the "negative list" for foreign investment.

The Chinese economy has demonstrated resilience and delivered growth in recent years, and it has sustained the confidence of multinational companies in the future of the Chinese market.

China has been pursuing a high-level opening-up process, while continuously improving the business environment, which has drawn strong positive responses from foreign companies. Airbus has welcomed recent favorable policies. The company is committed to becoming a model of cooperation in the high-tech aerospace industry between China and Europe, it said in a note shared with the Global Times on Tuesday.

Airbus is not alone in its positive attitude. "China is one of our major markets and plays a strategic role in our global business. With the improved business environment and ongoing pursuit of high-standard opening-up, we continue to invest in China to strengthen our end-to-end capabilities. We remain positive and confident about the future of the China market," said Anna An, president of Henkel Greater China.

The view was echoed by Tetsuro Homma, executive vice president of Panasonic Corporation. The Chinese market has incomparable advantages in terms of innovation speed, market size, intelligentization, ability to absorb and digest new technologies, talent reserves and supply chain, Homma said.

The comments came after the government work report was delivered by Chinese Premier Li Qiang to the annual session of the National People's Congress (NPC) on Tuesday.

China is aiming for economic growth of around 5 percent in 2024, Li said, adding that China will promote alignment with high standard international economic and trade rules, steadily expand institutional opening-up and facilitate interplay between domestic and international markets.

"We will further shorten the negative list for foreign investment. All market access restrictions on foreign investment in manufacturing will be abolished, and market access restrictions in services sectors, such as telecommunications and healthcare, will be reduced," Li said.

The Chinese government's ambitious growth target of about 5 percent means that the government needs to take measures to offset the effect of the sluggish real estate industry, said Maximilian Butek, executive director at the German Chamber of Commerce in China (Shanghai).

He said German companies are very much looking forward to China's measures to stimulate demand, and they believe in the mid- to long-term potential of the Chinese market.

China's economy has been recovering over the past two years, and the country remains a powerful engine of global economic growth. As the world's second-largest economy, China will continue to be a driving force for global manufacturing and trading, and an important stabilizer in the global supply chain, Rio Tinto Chief Commercial Officer Alf Barrios told the Global Times.

The Chinese government has intensified efforts to enhance openness at higher levels across the board and created favorable conditions for foreign companies to innovate, invest, operate and grow in China, making foreign companies a significant driving force and an integral part of China's high-quality economic growth, said Zhou Xiaolan, executive vice-president of the pharmaceuticals division of Bayer AG.

Many foreign companies told the Global Times that China has become an important market for them, and their plans in China are getting bigger. Schneider Electric said it has 29 factories and distribution centers in China, more than 1,600 Chinese suppliers, and five R&D centers. Airbus said the work on expansion of its Tianjin A320 family assembly line in Tianjin is now in full swing.

Henkel said that in January, they opened a new Asia R&D center for consumer business. And Rio Tinto said that in 2023, China was again its largest market globally, with revenue accounting for nearly 60 percent of the company's total.

Last year, Bayer inaugurated an open innovation center in Beijing, the first of its kind in China. Simultaneously, the Beijing plant of Bayer Radiology opened. In addition, the construction of a new supply center in Hangzhou commenced last year. This center is anticipated to become operational within this year.

Even under the difficult circumstances of the epidemic, Panasonic said it still strengthened its investment in China and built 17 new production bases, including three in 2023. There are also multiple investment plans for 2024, and one in Beijing has been confirmed.

The work report also said the Chinese government will strive to modernize the industrial system and develop new quality productive forces at a faster pace. The report listed a series of tasks in this respect, including industrial and supply chain improvement and upgrading, and the cultivation of emerging industries and future-oriented industries such as hydrogen power and new materials.

As the key to achieving high-quality development, new productive forces have received great attention from all industries. Schneider Electric is committed to supporting the growth of the new productive forces with its technological and innovative advantages in digitization and sustainability, said Executive Vice President of China & East Asia Operations Yin Zheng.

With world leading products and solutions in automation and energy management, the company can boost the overall competitiveness and impact of Chinese industries, help to build new productive forces, and accelerate the "dual-carbon" goals, Yin said.

Airbus said 2024 will be a year of opportunities for it to continue developing its business and cooperation in China while maintaining strong impetus in the domestic market. The company remains committed to China, it said, and will continue to invest in the future, jointly promoting high-quality development with Chinese partners.

China's chunyun for 2024 - the Spring Festival travel rush - will officially conclude on Tuesday. An estimated 9 billion passenger trips are expected to have been made during the 40-day rush, with bustling scenes seen across China from busy markets to hustling railway activity, which are vivid displays of economic vitality.

The consumption boom during the Spring Festival holidays coupled with thriving trade cooperation represented by the uninterrupted China-Europe freight train services will significantly contribute to the country's steady economic growth in the first quarter of 2024, with sustained momentum for the rest of the year, observers said.

On Sunday alone, 182.45 million trips were made, up 14.4 percent year-on-year and up 4.5 percent compared with the same period in 2019, official data showed. During the first 33 days of the holiday, 7.02 billion trips were made, and cargo transportation remained efficient and orderly, Transport Minister Li Xiaopeng told a press conference on February 28.

The strong consumption rebound during the holidays promoted the revival of involved industries and will significantly support GDP growth for the first quarter, Wang Peng, an associate researcher at the Beijing Academy of Social Sciences, told the Global Times on Monday.

Wang said that booming holiday consumption has laid a solid foundation for driving up the economy's development for the whole year while boosting market confidence.

The spending power on display during the holidays is still a major potential growth point for continued economic development, Cong Yi, a professor at the Tianjin University of Finance and Economics, told the Global Times on Monday.

Both Wang and Cong highlighted the growing demand for consumption upgrading as Chinese consumers now pursue high-quality products with elevated services and experiences and are relatively less price sensitive.

The upgrading demand will inspire market players to ramp up product and service quality for sustained operations in the long term.

Analysts pointed to the integration of the cultural, sports and tourism sectors as another new engine for propelling holiday consumption, on top of the already booming domestic and international tourism.

From diverse Spring Festival celebrations combining China's intangible cultural heritage with local attractions to the 14th National Winter Games boosting ice-snow consumption, the integration of the cultural, sports and tourism sectors led to fruitful and innovative results during the holidays, Jiang Yiyi, a deputy head of the School of Leisure Sports and Tourism at Beijing Sport University, said on Monday.

During the eight-day Chinese Lunar New Year holidays, 474 million domestic trips were made, up 34.3 percent year-on-year, and the total domestic tourism spending jumped by 47.3 percent year-on-year to about 632.69 billion yuan ($87.88 billion), according to data released by the Ministry of Culture and Tourism.

Jiang attributed the continuous expansion in tourism to rising outbound tourism, and China's strengthened efforts and stepped-up policy support underscored the country's firm determination to promote high-quality opening-up.

In a latest move, the mutual visa-exemption agreement between China and Thailand officially took effect on Friday, with bookings for two-way travel surging on the same day.

"China retains its strength as a major global market with huge spending power. Achieving success in the Chinese market first will be the foundation for foreign players to claim global success," Cong said, adding that the Chinese market has stepped up its competitiveness.

International cargo trade during the holidays thrive. For instance, customs at Manzhouli Port in Inner Mongolia inspected and cleared 94 China-Europe freight trains entering and exiting the border, up 17.5 percent from the Spring Festival holidays in 2023.
In 2023, some 17,000 China-Europe freight trains were dispatched, up 6 percent year-on-year, carrying 1.9 million containers, up 18 percent, Liu Ruiling, a member of the 14th National Committee of the Chinese People's Political Consultative Conference (CPPCC), said during an interview ahead of the opening of the second session of the 14th CPPCC National Committee in Beijing.

"More than 85,000 China-Europe cargo trains ran as of February this year, linking China with 217 cities and 25 countries in Europe," said Liu, who is also the general manager of the International Land Port in North China's Hebei Province.

Wang said that China would actively engage in more international economic cooperation and competition and diversify its cooperation partners, while consolidating international cooperation in emerging and innovative industries such as green finance.

China's leading digital economy with its large-scale data resources, diverse data types and rich application scenarios have provided advantages for the country's artificial intelligence (AI) sector, Qi Xiangdong, chairman of Qi An Xin Technology Group, who is also a member of the National Committee of the Chinese People's Political Consultative Conference (CPPCC), told the Global Times on Friday.

Qi said that AI depends on data, and China's rapidly developing digital economy provides a large source of data. He added that the total scale of China's digital economy reached 50.2 trillion yuan ($6.97 trillion) in 2022, and the breadth and depth of digital integration in the real economy has expanded.

Qi An Xin launched China's first industrial-grade large-model security AI product - Q-GPT a cybersecurity robot - which has numerous practical applications, Qi said.

Qi noted that he looks forward to the country accelerating the integration of cybersecurity and AI technology, promoting the application of innovative products in the field of "AI + security," and continuously improving China's ability to cope with cybersecurity risks and uncertainties.

Technical workers assemble DC charging piles for electric vehicles in a factory in the Hefei Circular Economy Demonstration Park in Hefei, East China's Anhui Province, on February 28, 2024. Photo: VCG

Chinese Commerce Minister Wang Wentao met with Australian Minister for Trade and Tourism Don Farrell on Monday, calling for strengthened cooperation in China's joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The meeting marks a new attempt towards building closer bilateral trade ties.

During the meeting held in Abu Dhabi, Wang expressed hopes of ensuring practical outcomes from the 13th WTO Ministerial Conference, and he emphasized the continuous improvement and resilience of China-Australia relations, highlighting stability and positive momentum in economic and trade cooperation.

Both sides exchanged views on bilateral economic and trade relations and issues of mutual concern, with a focus on creating a favorable environment for business collaboration.

Farrell praised Australia's strong and dynamic economic and trade relationship with China, noting the growth in bilateral trade and investment in 2023. He welcomed Chinese investment and assured fair treatment for all international investors, including those from China.

Farrell also expressed interest in expanding Australian exports to China, aiming to elevate bilateral trade to new heights.

Recent developments have seen progress in various economic and trade areas, with the Chinese Ministry of Commerce (MOFCOM) initiating a review investigation into anti-dumping measures and countervailing tariffs on Australian wine. The move could potentially lead to the lifting of tariffs on Australian wine.

Against the backdrop of China's growing foreign investment, there has been a notable increase in newly established foreign-invested enterprises in January, with a significant rise in investments from Australia, which saw a staggering 186 percent year-on-year increase, according to MOFCOM.

Furthermore, Wang has expressed China's willingness to cooperate with multiple countries on joining the CPTPP. During a meeting with New Zealand's Trade Minister Todd McClay on Sunday, he highlighted China's intention to work with New Zealand in the process of joining CPTPP and the Digital Economy Partnership Agreement.

The 13th WTO Ministerial Conference provided China with an opportunity to engage with relevant countries with economic and trade talks, and advancing partnership in the CPTPP, Huo Jianguo, a vice chairman of the China Society for World Trade Organization Studies in Beijing, told the Global Times on Monday.

China is willing to work with other CPTPP members in reaching trade cooperation agreements, promoting the development of the organization, Huo noted.