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Yesterday, the much-watched report card of China's economy in 2018 was released. At a press conference on the operation of the national economy in 2018 held by the Information Office of the State Council on January 21, Ning Jizhe, director of the National Bureau of Statistics, said that according to preliminary calculations, the GDP for the whole year of 2018 was 90030.9 billion billion yuan, an increase of 6.6 percent over the previous year at comparable prices, achieving the expected development goal of about 6.5 percent. In the complex international and domestic environment, China's economic operation has achieved overall stability and steady progress, and the main expected goals of economic and social development have been well achieved.

1. 2018 China's economy: steady progress, good news and bad news

According to analysts, this report card has pressure and surprise.

First, the total economic volume broke through the 90 trillion yuan mark, and GDP increased by 6.6 year-on-year. The market forecast and previous tasks were 6.5. This shows that the economic operation remains within a reasonable range, and the overall stable and steady progress continues to appear. The main expected goals of development are better completed. But quarterly, quarterly, quarterly growth of 6.8 percent in the first quarter, 6.7 percent in the second quarter, 6.5 percent in the third quarter, and 6.4 percent in the fourth quarter; it fell continuously and hit a new low since the second quarter of 2009.

Second, imports and exports are stable and improving, and the balance of payments is basically balanced. The total import and export volume of the whole year exceeded 30 trillion yuan for the first time, and the scale of trade in goods reached a record high, maintaining the first place in the world. The trade structure continued to be optimized, the proportion of general trade imports and exports increased, the proportion of exports of mechanical and electrical products increased, foreign exchange reserves were above US $3 trillion, and the RMB exchange rate was basically stable. However, the growth rate has declined. From the perspective of classified items, exports in 2018 have become a drag on the economy. The contribution rate of net exports to economic growth is -8.6, and it is expected to recover in 2019.

Third, investment continued to decline. In 2018, fixed asset investment increased by 5.9 year-on-year, down 1.3 percentage points from 2017. This is also a new low since 2000, in which the growth rate of infrastructure investment has fallen sharply due to previous deleveraging and debt constraints, with infrastructure growth of only 3.8 per cent year-on-year in 2018, down 15.2 percentage points from the 19 per cent growth rate in 2017. Real estate development investment is high and low, and will face downward pressure in 2019.

Fourth, domestic demand has gradually started to become a stabilizer of the economy. The contribution of final consumption expenditure to GDP growth reached 76.2 per cent, up 18.6 percentage points from the same period last year. Total retail sales of consumer goods rose 8.2 percent year-on-year in December, up 0.1 percentage points from November.

Five is the industrial structure adjustment shift. The secondary industry has fluctuated and declined, and the tertiary industry has clearly improved, with its contribution exceeding 60%. High-tech manufacturing, strategic emerging industries and equipment manufacturing grew rapidly, up 11.7 per cent, 8.9 per cent and 8.1 per cent respectively over the previous year, but traditional manufacturing industries such as automobiles, railways, ships, aerospace and other transport equipment performed poorly. The good news is that the second industry began to recover significantly in the fourth quarter of last year. Power generation also rebounded to 6.2 per cent in December, with upstream and midstream production picking up and signs of a strong cycle start.

Sixth, in 2018, China's annual consumer price index CPI rose 2.1 percent over the previous year, in a moderate range of increases, below the expected target of about 3 percent. The balance between supply and demand of industrial consumer goods is generally stable, and the total supply of many industrial consumer goods exceeds demand, so it is necessary to "improve quality and upgrade with higher standards to better meet the consumption needs of the masses".

2. What do you think of the decline in industrial economic growth?

So, since September 2018, industrial growth has fallen below 6%, does this mean that industrial growth has slipped out of a reasonable range? In response, Xin Guobin, Vice Minister of Industry and Information Technology, responded at a press conference at the State Information Office on January 16:

Since the second half of last year, especially after the third quarter, under the combined effect of multiple factors such as the slowdown of global economic growth, domestic active structural adjustment, and risk prevention, the industrial growth rate has slowed down for several consecutive months, with some fluctuations. It is also a fact that the anxiety of the business community has increased. How to look at this problem should be considered from the following dimensions.

First of all, the overall operation of the industrial economy remains within a reasonable range, and the actual operation results are better than expected. When setting the annual industrial value-added growth target for 2018, our expected target is 6%. From January to November, the national industrial added value increased by 6.3. Even if the growth rate is maintained at a low speed in December, the completion of the annual target and task is still guaranteed.

In addition, among these indicators, some economic indicators perform relatively well, such as efficiency indicators. In the first 11 months, the profits of industrial enterprises nationwide have increased by 11.8, and the profit margin of main business income has increased by 0.16 percentage points year-on-year. For example, in terms of investment, driven by factors such as improved corporate efficiency, accelerated energy-saving and environmental protection transformation, and accelerated cultivation of emerging industries, manufacturing investment in the first 11 months increased by 9.5 year-on-year, rebounding to a higher level in recent years. The growth rate of industrial investment in 2016 and 2017 was relatively low, and now it has improved significantly.

Second, the current short-term fluctuations, some changes are the impact of external factors, but some are also the price that structural adjustment has to pay, and we are taking the initiative to act. In the long run, the fundamentals of China's industrial development are good, and the structural problems affecting the sustained and healthy development of industry are being gradually solved. For example, we have implemented the battle of pollution prevention and control, and a large number of "scattered pollution" enterprises have been cleared, which will affect the industrial output value of some industries and regions to a certain extent. However, the clearance of these enterprises has also made market space for advanced compliance production capacity.

Third, our country's economy is in a period of continuous transformation of old and new kinetic energy, and the pulling effect of some industries on growth is slowing down, but at the same time, we should see that some new kinetic energy is steadily forming. Although in the short term, these new growth momentum is not enough to offset the impact of the decline in some industries in the past, but this positive factor is something we are very happy to see.

From the overall industrial situation, in the case of the slowdown in the growth of traditional manufacturing, high-tech manufacturing continued to maintain rapid growth. In the first 11 months of 2018, the value-added growth rate of high-tech manufacturing reached 11.8 percent, significantly faster than the overall industrial growth rate, and its share in the overall industry has increased again, reaching 13.6 percent. Therefore, we say that while we see the decline of the pulling effect of some traditional industries on the whole industrial economy, we should also see that new kinetic energy is constantly cultivated and the leading role is also increasing. Of course, the task of structural adjustment is still very arduous. It should be noted that China's industrial economy is large in scale, resilient and has sufficient capacity to deal with various risks. In 2018, the scale of China's industrial added value is expected to reach 30 trillion yuan, continuing to maintain the first place in the world. 220 continues to lead the world in the output of many major industrial products, and we have the most complete industrial system in the world. In particular, the development of the digital economy and the "digital dividend" brought about by the development of digital, networked and intelligent manufacturing make us full of confidence in the future development of the manufacturing industry.

3. Textile industry has become the backbone of "stable"

In 2018, China's textile industry withstood the pressure with years of accumulation and precipitation, played a positive role in "stabilizing employment, stabilizing finance, stabilizing foreign trade, stabilizing foreign investment, stabilizing investment and stabilizing expectations", and became the backbone of maintaining the smooth operation of the economy. From the perspective of the economic operation of my country's textile industry from January to November 2018, my country's textile and apparel markets performed well, the growth rate of the industrial added value of textile enterprises above the national scale increased at a low level, the quality and efficiency of the entire industry continued to improve, and the industry's investment growth The rate continued to pick up, and the main indicators showed a stable operation trend.

◆ Good performance in internal and external markets

Since 2018, China's textile and clothing domestic demand market has shown a rapid growth trend. According to data from the National Bureau of Statistics, from January to November, the national retail sales of clothing, shoes, hats, and knitting textiles above the quota were 1.2 trillion billion yuan, an increase of 8.1 percent over the same period last year, and the growth rate was 0.5 percentage points higher than the same period last year. This growth rate has continued to slow since June 2018, but is still higher than the growth level of the previous two years. Online retail continues to grow rapidly, and combined with recent data, the scale of online retail continues to expand, with physical online retail sales accounting for 8.3 percent of retail sales of consumer goods rising from percent at the beginning of 2015 to 18.2 percent in November 2018. Among them, from January to November, the national retail sales of online wearing goods increased by 21.2 year-on-year, and the growth rate was 3.2 percentage points higher than the same period last year, but its growth rate has continued to slow since the beginning of 2018.

Textile industry exports continued to pick up. According to China Customs Express data, from January to December 2018, the total export volume of textiles and clothing was 276.731 billion billion US dollars, up 3.52 percent year on year. The layout of the international market has become more optimized. From January to November, China's exports of textile raw materials and textiles to the traditional markets of the United States, the European Union and Japan increased by 8.8, 2.9 and 3.5 respectively compared with the same period last year; exports to Vietnam, Indonesia and other emerging markets along the "Belt and Road Initiative" route increased well, with exports increasing by 26.5 and 21.5 respectively compared with the same period last year.

Low growth in value added growth

The industrial added value of the textile industry continued to grow at a low level. From January to November 2018, the industrial added value of textile enterprises above the national scale increased by 3.0 compared with the same period last year, 1.9 percentage points slower than the same period last year, and 0.1 percentage points higher than the third quarter of 2018. The chemical fiber and terminal industry grew rapidly. Since 2018, the growth rate of added value of chemical fiber industry has maintained a sustained and stable growth, from 0.5 in February to 8.0 in November, which is 5.0 percentage points higher than that of textile industry; the growth rate of added value of industrial textile industry is stable at about 8.2, and its growth rate is 8.4 from January to November; the growth rate of industrial added value of clothing and home textile industry is higher than that of the whole industry, but it continues to slow down, from January to November, its value-added growth rate was 4.5 per cent and 3.8 per cent, respectively. The competitiveness of the domestic equipment market has steadily improved, supporting the industrial added value of the textile machinery industry to increase by 10.7 year-on-year, which is 7.7 percentage points higher than the growth rate of the entire industry.

Among the major categories of products, growth was maintained except for the decline in garment production. From January to November 2018, the output of cloth, nonwovens and chemical fibers of enterprises above scale increased by 1.4, 9.7 and 7.6 respectively over the same period last year, with the growth rate increasing by 0.2, 9.1 and 4.5 percentage points respectively over the same period last year. Yarn and printed and dyed cloth production increased by 0.6 and 2.3 respectively over the same period last year, slowing down by 3.5 and 3.4 percentage points respectively over the previous year. Clothing production decreased by 3.0, the year-on-year decline deepened by 2.4 percentage points.

◆ Continuous improvement of operation quality and efficiency

The overall benefit growth of the textile industry was stable. From January to November 2018, 37000 textile enterprises above designated size across the country achieved a total of 5111.75 billion billion yuan in main business income, a year-on-year increase of 4.0 percent, and the growth rate slowed by 0.7 percentage points from the same period last year; the total profit was 249.89 billion billion yuan, a year-on-year increase of 7.9%, the growth rate increased by 0.5 percentage points over the same period last year.

Among the sub-industries, the profitability of the chemical fiber industry was stable, with the main business revenue and total profit increasing by 13.4 and 12.9 respectively from January to November compared with the same period last year; the profit contribution of the clothing industry was significant, with a profit growth rate of 10.1, and its contribution to the profit of the whole industry was 44.5. Although the growth rate of industrial added value in the clothing industry has slowed down and the output has shrunk, good economic benefits have been achieved through its quality improvement and brand operation, which has supported the improvement of the efficiency of the whole industry. The transformation and upgrading of the printing and dyeing industry is progressing positively. The main business income and total profit increased by 3.7 and 11.9 respectively year-on-year, and continued to rebound after reversing the trend of negative profit growth in August.

The quality of the textile industry is basically stable. From January to November, the sales profit margin of textile enterprises above designated size was 4.9, an increase of 0.2 percentage points from the same period last year; the total asset turnover rate was 1.3 times/year, an increase of 0.1 from the same period last year; the main business income cost of 100 yuan It was 88.4 yuan, down 0.1 year-on-year; the ratio of three fees was 7.0; the asset-liability ratio was 55.1, slightly higher than 0.5 percentage points in the same period last year, and still within a reasonable range.

Investment growth continues to pick up

According to the data of the National Bureau of Statistics from January to November 2018, the completion of fixed asset investment in the textile industry increased by 5.4 year-on-year, and the growth rate was 0.9 percentage points lower than the same period last year, but it continued the investment growth rate since 2018. Good momentum of continuous rebound.

Among the main sub-industries, investment in the textile industry increased by 4.9 year-on-year, and the growth rate was 1.2 percentage points lower than the same period last year; investment in the chemical fiber industry increased by 34.9 year-on-year, and the growth rate increased by 17.4 percentage points from the same period last year, and has been maintained for 8 consecutive months. In the high-speed growth range of more than 20%; the scale of investment in the clothing industry still maintained a shrinking trend, with a year-on-on-year, the investment decreased by 1.9, which was 3.8 percentage point.