China's economy review

China’s Economic Recovery Statistics

China’s National Bureau of Statistics has released key data on the country’s economic recovery. Concentrating on the first two months of 2021, and comparing to the same periods in 2020 and 2019

In February, China’s Manufacturing Purchasing Managers’ Index was 50.6%, above the 50% threshold for 12 consecutive months. Furthermore, the expected index of enterprise production and operation activities rose to 59.2%, 1.3% higher than in January.

Service Industry Business Activity Index in Expansion 

  • The national service industry production index increased by 31.1% YoY and 14.1% from January-February 2019, with a two-year average growth rate of 6.8%.
  • The real estate industry increased by 51.4% YoY, with a two-year average growth rate of 11.8%.
  • Information transmission, software, and information technology service industries increased by 26.1% YoY, with a two-year average growth rate of 14.4%.
  • February 2021 service business activity index reached 50.8%, remaining above the threshold for 12 consecutive months.
  • Business activity indexes for retail, catering, entertainment, and other household consumption-related industries were all in the expansionary range.

CPI Drop vs. PPI Growth

Between January and February, the national consumer prices fell by 0.3% YoY. This included:

  • 0.9% YoY increase for the categories of food, tobacco, and alcohol, of which tobacco, alcohol, and pork fell by 9.6%, grain rose by 1.5%, fresh fruits rose by 2.2%, and fresh vegetables rose by 6.9%.
  • -0.3% in housing prices and clothing. 
  • -0.1% in prices of daily necessities and services.
  • -3.3% for transportation and communications.
  • 0.3% for education, culture, and entertainment.
  • 0.4% for health care.

At the same time, the national factory prices for industrial producers rose by 1% YoY. From January to February, the purchasing prices of industrial producers nationwide increased by 1.6% YoY.

Investment Growth in Fixed Assets 

National investment in fixed assets (excluding rural households) reached RMB 4,523.6 billion in two months, with a YoY increase of 35%. Since January 2021, fixed asset investment has increased by 2.43%.

Trade in Goods

  • The total value of trade in goods reached RMB 5,441.8 billion in the first two months of 2021, with a YoY increase of 32.2%.
  • Among these, exports saw an increase of 50.1%, while imports accounted for an increase of 14.5%.
  • From January to February, exports of mechanical and electrical products increased by 54.1% YoY, accounting for 60.3% of total exports.
  • General goods trade accounted for 61.6% of total trade, increasing 1% over the same period last year.

Urban Unemployment Dropped 

  • 1.48 million new jobs were created in cities and towns across the country at the beginning of 2021.
  • In January, the nationwide urban unemployment rate was 5.4%. It rose 0.1% in February, basically remaining stable over the past 3 quarters.
  • The unemployment survey rate among the urban registered population was 5.7%, and the unemployment rate inclusive of all population working in the cities was 5.2%.
  • The unemployment rates of the population aged 16-24 and the population aged 25-59 were 13.1% and 5.0%. The youth population between ages 16-24 remains the highest unemployed cohort.
  • The average weekly working hours of employees in national enterprises were recorded at 46.3 hours.

Huawei Releases IP White Paper, and the state of China’s IP Ownership

Huawei’s number of global patent applications rose sharply after 2010, most notably in comparison to Qualcomm. The patent applications measured here are not exclusive to 5G, and do not pertain to the same categories. However, the sharp rise since 2010 indicates the strong growth in investments in R&D by Huawei. 

This trend also coincides with the larger Chinese initiatives to invest in innovation over the past decade, particularly post the 2008 Global Financial Crisis. 

Based on the empiricals of international patent filings, 

  • China overtook Germany as the world’s third largest patent filer in 2011. 
  • China overtook Japan as the world’s second largest patent filing in 2017.
  • China overtook the US as the world’s largest patent filer in 2019. 

China Becomes Top Filer of International Patents in 2019

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