Good growth momentum can be sustained despite challenges

National Bureau of Statistics data show that the rapid growth momentum of industrial enterprises above designated size in the second half of last year continued into the first two months of this year. They made 1,114.01 billion yuan ($169.99 billion) in profit, up 1.79 times year-on-year and 72.1 percent compared with the growth during the same period in 2019.

Multiple factors played a role in making this possible. Owing to the outbreak of the novel coronavirus epidemic, the profits of industrial enterprises above designated size dropped 38.3 percent year-on-year in the first two months of 2020, setting the low base for higher growth figures during the same period this year.

Besides, as the authorities advised people to stay in the cities where they work during the Spring Festival holiday instead of going to their hometowns, many enterprises extended their working time, boosting both production and profit.

At the same time, the continuous improvement in the epidemic situation at home and the steady recovery of external market demand have also helped domestic industrial enterprises accelerate their production and sales, thus increasing profits.

Despite industrial enterprises registering high profits within a short period, the foundation for a full recovery of the industrial economy needs to be further consolidated. For example, raw material suppliers such as oil, steel and nonferrous metal companies saw their profits jump 3.46 times year-on-year in the first two months of this year, but such a rapid rise in profits has increased the pressure of raw material prices on small and mediumsized enterprises in other industries.

China’s consumer price index is at a relatively low level, but the potential inflation caused by rising commodity prices from upstream to downstream may bring potential uncertainties for the economy’s full recovery.

To make matters worse, Western countries led by the United States are leaving no stone unturned to smear China on human rights by fabricating lies, in an attempt to undermine the security and stability of China’s industrial chains.

Despite the challenges, China can keep its economic growth within a reasonable range and create jobs, increasing people’s incomes and stabilizing prices, as long as it maintains policy measures aimed at promoting employment and improving livelihoods, and expedites targeted financial support and tax cuts.