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An Improving National Economy and a Positive Start for the 14th Five-Year Plan

By Ning Jizhe Source: English Edition of Qiushi Journal Updated: 2022-05-12

The year of 2021 marked milestones in the history of the Communist Party of China (CPC) and the People's Republic of China, and it was a year of special importance in our country's modernization. Last year, we continued to lead the world in economic development and our handling of the Covid-19 pandemic. We realized in full our major economic and social development goals, took new strides toward building a new development dynamic, and made new achievements in high-quality development, all of which got the 14th Five-Year Plan off to a good start. 

I. World-leading economic growth and national strength expansion 

Faced with complex and daunting domestic and international environments, all regions and departments adhered to the policies and plans of the CPC Central Committee and the State Council on increasing support for the real economy and coordinating efforts to contain the pandemic with developing the economy and society. Thanks to these efforts, the size of our economy and per capita GDP reached new heights, output of major industrial and agricultural products swelled, and our composite national strength, social productivity and international influence all grew further. 

China's economic growth was the highest among the major economies. 

In 2021, China's gross domestic product (GDP) grew 8.1% over the previous year, which was higher than the IMF's forecasts for the US, the Eurozone, and Japan, of 6%, 5%, and 2.4% respectively, making China the best performer among the world's leading economies. 

Total economic output topped 110 trillion yuan. 

Last year, China's GDP reached 114.4 trillion yuan, or US$17.7 trillion at the annual average exchange rate. China's economy remained the second largest in the world and estimated to account for more than 18% of the global economy. 


Workers on an assembly line for snow-making machines at a ski equipment manufacturer in the Beijing-Zhangjiakou Winter Olympic Park in Xuanhua District, Zhangjiakou, Hebei Province, April 7, 2021. In recent years, Xuanhua District has used the 2022 Beijing Winter Olympics and the integrated development of the Beijing-Tianjin-Hebei region as opportunities to drive development of its ice and snow sports equipment manufacturing sector. PHOTO BY CHEN XIAODONG 

GDP per capita was over US$12,000. 

In 2021, China's GDP per capita reached 80,976 yuan, equivalent to US$12,551. It is expected that China's GDP per capita will exceed the global average figure, and it is fast approaching the threshold for high-income economies set by the World Bank. 

Productive forces developed steadily. 

In 2021, China's total grain output stabilized at more than 650 million metric tons, and its output of cereals, seed cotton, peanuts, meat, tea, and fruit all ranked first in the world. China also led the world in its output of crude steel (1.03 billion metric tons), power (8.1 trillion kWh), fertilizer (54.46 million metric tons), cloth (39.6 billion meters), automobiles (26.53 million), microcomputers (470 million), and mobile phones (1.66 billion). 

International influence continued to grow. 

China ranks first in the world for trade in goods and foreign exchange reserves, and it ranks second in the world for service trade, outward investment, and the size of its consumer market. In 2021, China's economic growth is estimated to have accounted for approximately 25% of world economic growth, and it has been the leading force in the recovery of the world economy. 

II. Continued recovery of the national economy and fulfillment of major targets 

All regions and departments did a solid job in stabilizing the six fronts and guaranteeing the six priorities* as well as adjusting cross-cycle macro policies. As a result, China's economy continued to recover and develop, and the main targets and key tasks proposed at the start of 2021 were fulfilled, achieving the optimal combination of higher growth, higher employment, and lower prices. 

The economy grew rapidly. 

In 2021, China's economic growth rate exceeded the target of more than 6%, with year-on-year quarterly growth rates of 18.3%, 7.9%, 4.9%, and 4%, giving average two-year quarterly growth rates of 4.9%, 5.5%, 4.9%, and 5.2%, after growth rates of 0.3%, 1.3%, 0.7%, and 1.6% in the preceding period, respectively. This indicates that overall economic operations remained stable and the size of the economy expanded quarter-by-quarter. 

Employment was stable overall. 

In 2021, 12.69 million new urban jobs were created, meeting the target of more than 11 million, and the national surveyed urban unemployment rate averaged 5.1%, lower than the forecast of around 5.5%. 

Consumer prices rose moderately. 

In 2021, consumer prices increased 0.9% over the previous year, 1.6 percentage points lower than the previous year's increase, and below the expected level of around 3%. 

The balance of international payments neared equilibrium. 

Last year, the surplus in China's foreign trade in goods was 4.37 trillion yuan, an increase of 20.2% from 2020, fulfilling the requirement to steadily increase import and export volume. The balance of China's foreign exchange reserves at the end of last year stood at US$3.25 trillion, and it has remained above US$3.2 trillion for eight consecutive months. 

Personal income growth kept pace with economic growth. 

In 2021, national per capita disposable income was 35,128 yuan, an increase of 8.1% in real terms over the previous year, giving an average increase of 5.1% over two years. This was basically in line with economic growth and satisfied the requirement to ensure steady growth of personal income. 

Energy consumption per unit of GDP decreased. 

Preliminary data show that in 2021 energy consumption per unit of GDP in China fell 2.7% year on year, which was near the target reduction of around 3% and achieved the aim of decreasing emissions of major pollutants. 

Grain output reached a new high. 

In 2021, total grain output was 682.9 million metric tons, an increase of 13.4 million metric tons, or 2%, over the previous year, meeting the target of producing over 650 million metric tons. 

III. Strong scientific and technological innovation and resilient industrial development 

China thoroughly implemented its innovation-driven development strategy, gradually improved its technological innovation capabilities, developed the real economy through innovation, and achieved outstanding results in the coordinated development of its primary, secondary and tertiary industries. 

National strategic scientific and technological capabilities grew quickly. 

In space travel, the Shenzhou-12 and Shenzhou-13 spacecraft were launched, allowing Chinese astronauts to set foot inside China's Tiangong space station for the first time, the Tianwen-1 probe successfully landed on Mars, and the Xihe probe marked a breakthrough in Chinese solar exploration. A number of national laboratories were established. A rapid increase in R&D expenditure across all sectors lent strong support to primary innovation and breakthroughs in key core technologies. In 2021, R&D expenditure increased 14.2% over the previous year, equivalent to 2.44% of GDP, up 0.03 percentage points year on year. By the end of 2021, China had 7.5 high-value invention patents per 10,000 people. 

Agricultural production thrived. 

In 2021, the added value of primary industry was 8.3 trillion yuan, up 7.1% over the previous year. Yields of summer grain crops, early rice, and autumn grain crops all increased, reaching 145.9 million metric tons, 28 million metric tons, and 508.9 million metric tons, respectively, which contributed to record-high grain output. The livestock industry grew steadily, with pork, beef, mutton, and poultry production totaling 88.87 million tons, up 16.3% over the previous year. The number of live pigs in China returned to normal levels, reaching 449.22 million by the end of the year, a year-on-year increase of 10.5%. 

Industrial manufacturing continued to develop. 

The total industrial added value in 2021 was 37.3 trillion yuan, a year-on-year increase of 9.6%, which was 1.5 percentage points above GDP growth. The added value of the manufacturing industry was 31.4 trillion yuan, up 9.8%, and 0.2 percentage points higher than the growth of total industrial added value. The added value of large equipment manufacturers increased 12.9%, which was 3.3 percentage points higher than the growth in added value of large industrial enterprises as a whole. The resilience of industry and supply chains was also enhanced. Last year, output of metal containers and integrated circuits, which were in short supply, increased 110.6% and 33.3% year on year, respectively. 

The service industry continued to recover. 

The added value of tertiary industry in 2021 was 61 trillion yuan, a year-on-year increase of 8.2%. This included 17.2% growth of information transmission, software, and information technology services industry and 12.1% growth of the transportation, storage, and postal industry. Transportation and logistics received an effective boost, with year-on-year increases in freight volume and cargo throughput at national ports of 12.4% and 6.8%, respectively. Smooth flowing freight gave play to the advantages of China's complete industrial system. 

IV. A growing domestic market and increased demand from overseas markets 

Despite repeated waves of the Covid-19 pandemic and shrinking markets, all relevant parties implemented the strategy to expand domestic demand, causing consumption and investment in China to grow. Consequently, domestic demand continued to become the main driver of economic growth. The effects of stabilizing trade and foreign investment were evident, and the propulsive effect of growing external demand strengthened.


Rice is ready to harvest at Hubin Village, Zhenjiang, Jiangsu Province, October 30, 2021. In 2021, China's total grain output hit a record high, with yields of summer grains, early-season rice, and autumn grains all rising. PHOTO BY WEI XUELIANG 

Sales recovered well. 

Last year, total retail sales of consumer goods rose above 40 trillion yuan, reaching 44.1 trillion yuan, which was significantly higher than in 2019 and an increase of 12.5% over 2020. Of enterprises with annual revenue over 5 million yuan across 18 commodity categories, nearly 80% achieved double-digit growth in retail sales. 

Investment continued to expand. 

In 2021, fixed asset investment exceeded 50 trillion yuan, reaching 54.5 trillion yuan, up 4.9% on the year before, including a rapid expansion of investment in industrial upgrading. Investment in manufacturing and high-tech industries increased 13.5% and 17.1% compared to 2020, respectively, which were 8.6 and 12.2 percentage points higher than growth in total investment. 

Foreign trade gained accelerated growth. 

Greater external demand drove exports, while domestic demand increased imports. In 2021, the total value of China's RMB-denominated imports and exports was 39.1 trillion yuan, up 21.4% over the previous year, with the value of exports up 21.2%, and the value of imports up 21.5%, which represented record highs and the highest growth rates for many years. China's imports and exports of US dollar-denominated goods, meanwhile, broke through the US$5 trillion and US$6 trillion marks, reaching US$6.05 trillion for the year, which represents an even greater share of the global market. Trade in services also continued to recover, with the total value of service imports and exports from January to November denominated in RMB increasing 14.7% year on year, including a 31.5% increase in the value of service exports. 

Consumption, investment, and net exports all contributed to economic growth. 

Last year, final consumption expenditure, gross capital formation, and net exports of goods and services drove economic growth by 5.3, 1.1, and 1.7 percentage points, respectively, with contribution rates of 65.4%, 13.7%, and 20.9%. The contribution of domestic demand to economic growth was 79.1%, 4.4 percentage points higher than the previous year. 

V. Optimization of the economic structure and gradual improvements in quality and efficiency 

The transformation and upgrading of industry accelerated, optimization of the demand structure continued, and China's new type of urbanization progressed steadily. Major regional strategies and strategies for coordinated development between regions were implemented, thereby enhancing the comprehensive, coordinated, and sustainable nature of development. 

The industrial structure underwent optimization and upgrading. 

In 2021, the added value of manufacturing accounted for 27.4% of GDP, up 1.1 percentage points from 2020. The added value of tertiary industry accounted for 53.3% of GDP, 13.9 percentage points higher than secondary industry, and its growth contributed 54.9% of total economic growth, 16.5 percentage points more than secondary industry. 

The demand structure improved. 

Last year, final consumption expenditure accounted for 54.5% of GDP, 11.5 percentage points higher than gross capital formation, and the contribution rate of final consumption expenditure to economic growth was 51.7 percentage points higher than that of gross capital formation. Consumption is now the main component of the overall economy and the primary driver of economic growth. 

Development of urban and rural areas was better coordinated. 

The level of urbanization in China increased, reaching 64.72% of the permanent population by the end of 2021, an increase of 0.83 percentage points year on year. The income gap between urban and rural areas continued to narrow, as evidenced by a decrease of 0.06 in the per capita disposable income ratio of urban and rural residents to 2.5:1. There were many bright spots in China's economic development last year, including the rapid growth of provinces and cities in central and western parts of the Yangtze Economic Belt. 

Labor productivity rose. 

China's overall labor productivity was estimated to have risen by 8% in 2021 compared to 2020. 

The industrial capacity utilization rate increased. 

The national industrial capacity utilization rate reached 77.5% in 2021, an increase of 3 percentage points over the previous year, which was relatively high in recent years. 

The operational efficiency of firms and fiscal revenue improved. 

In 2021, total profits of large industrial enterprises across China increased 34.3% year on year, with an average increase of 18.2% over two years, and the operating margin was 6.81%, up 0.76 percentage points. Revenue in the national general public budget increased 10.7% from 2020, representing 102.5% of the budgeted figure. 

VI. Deepening institutional reform and emerging development vitality 

China's supply-side structural reform continued, implementation of reforms in key areas accelerated, a market- and law-based environment for international business took shape, and the vitality and internal momentum of the market improved. 

The potential of microeconomic entities was unleashed. 

By the end of last year, there were 154 million registered market entities in China, including 48.42 million enterprises and 103 million individually owned businesses. This rapid increase in market entities was pivotal to growth and employment. 

Business entities under all forms of ownership developed vigorously. 

In 2021, among large industries, the added value of state-controlled enterprises, joint-stock enterprises, private enterprises, and enterprises with foreign investment and investment from Hong Kong, Macao, and Taiwan saw year-on-year increases of 8%, 9.8%, 10.2%, and 8.9%, respectively. Meanwhile, private investment increased 7% over the previous year, 2.1 percentage points higher than total investment, and the import and export volume of private enterprises increased 26.7%, contributing 58.2% to the growth in the total volume of imports and exports. 

New drivers of development gained strength. 

China's high-tech industries are experiencing rapid growth. Last year, the added value of large high-tech manufacturers increased 18.2% over the previous year, 8.6 percentage points higher than large industries as a whole. Output of industrial robots, smart watches, and optoelectronic devices increased 44.9%, 37%, and 24.1%, respectively. New forms and models of business also continued to emerge. The volume of express deliveries in 2021 reached 108.3 billion transactions, up 29.9% over the previous year, accounting for more than half of the world's parcels. Online retail sales of physical goods increased 12%, which was 24.5% of all retail sales of consumer goods. 

VII. Further opening to the outside world and mutually beneficial cooperation 

China continued to expand spheres, fields, and levels of its economy opened to the outside world, engaged in new methods of foreign trade, relaxed market access for foreign capital, and accelerated the formation of a high-level open economy. 

The trade structure continued to improve. 

In 2021, the import and export volume of general trade accounted for 61.6% of all imports and exports, and exports of mechanical and electrical products accounted for 59% of total exports, as structural optimization boosted foreign trade. Imports and exports of cross-border e-commerce were worth 1.98 trillion yuan last year, a year-on-year increase of 15%, and the number of overseas warehouses increased to over 2,000. China's new model is becoming an important driver of foreign trade. 

Foreign investment in China reached a record high. 

In 2021, China's actually utilized foreign capital reached a record high of 1.15 trillion yuan, up 14.9% over the previous year, proving that China continues to be a popular destination for foreign capital. Foreign capital utilized by the high-tech and service industries increased last year by 17.1% and 16.7%, respectively. 

Outward investment grew steadily. 

China's outward direct investment across all industries was 936.7 billion yuan in 2021, an increase of 2.2% from 2020. 

Joint development of the Belt and Road Initiative (BRI) strengthened. 

As of January 2022, China has signed more than 200 cooperation agreements related to the BRI with 147 countries and 32 international organizations. In 2021, China's imports from and exports to BRI countries increased 23.6% over the previous year, and investment in BRI countries increased 7.9%. In addition, more than 15,000 freight trains traveled between China and Europe last year, an increase of 22%. 

New prospects developed in foreign trade and economic cooperation. 

In 2021, 10 countries including China completed ratification of the Regional Comprehensive Economic Partnership (RCEP), which officially entered into force on January 1, 2022. The 15 signatory countries to the agreement together account for approximately 30% of global population, GDP and trade, making it the world's largest free trade area. 

VIII. Solid progress in green development and improvements to public wellbeing 

China made great strides in its ecological conservation, strengthened environmental protection, and stepped up efforts to protect and improve public wellbeing. Personal income and consumption increased, and people's feelings of wellbeing, gain, and security grew. 

The low-carbon transition gathered pace. 

The proportion of clean energy consumption rose in China last year, with energy generated from natural gas, hydropower, nuclear power, wind power, and solar power rising by 1 percentage point over the previous year as a proportion of total energy consumption, while coal consumption decreased by 0.8 percentage points. Output of green products grew rapidly in 2021, including year-on-year increases of 145.6% and 42.1% in new energy vehicles and solar cells, respectively. 

The quality of the environment continued to improve. 

In 2021, the proportion of days with good or excellent air quality in 339 cities at or above prefectural level was 87.5%, up 0.5 percentage points from 2020, and of the 3,641 national surface water assessment stations, the proportion of stations reporting good water quality was 84.9%, up 1.9 percentage points, as the campaign for blue skies and clean water continued to reap results. 

Personal income and consumption returned to growth. 

All types of personal income increased last year, including 9.6%, 11%, and 10.2% growth in per capita wage income, net income from business, and net income from property, respectively. Personal consumption continued to increase in 2021, with consumption expenditure per capita experiencing nominal growth of 13.6%, or 12.6% after adjusting for inflation, giving average real growth of 4% over two years. 

Investment in public wellbeing increased further. 

National per capita net transfer income increased 5.8% in nominal terms last year compared to 2020, representing an average increase of 7.2% over two years, including an increase of 14.6% in per capita income from policy-backed living subsidies and a 21.1% increase in per capita medical expense reimbursements. Social sector investment, meanwhile, increased 10.7% over the previous year. 

IX. Prioritizing stability while pursuing progress and overcoming difficulties 

Domestic development faces the threefold pressures of contracting demand, supply difficulties, and weakening expectations, and many risks and challenges lie on the road ahead. Despite this, China's development is resilient and still has great potential, as our long-term economic growth fundamentals, the trend of a sustained and stable recovery, and conditions that promote high-quality development remain unchanged. 

Formulate policies to bolster economic stability. 

In response to downward pressures on the economy, we must take practical steps to execute the Party's guideline, principles and policies, implement stable and effective macro policies, judiciously introduce contractionary policies, and formulate preemptive policies. We must strengthen coordination between fiscal policy and monetary policy, and properly integrate cross-cyclical and counter-cyclical regulation. We will continue to implement measures to contain Covid-19 on an ongoing basis, while dealing with local outbreaks in a targeted and scientific manner. 

Continue to stimulate the vitality of market entities. 

Given the difficulties in production and business operations of enterprises as well as changing public expectations, we must focus on market entities to implement micro policies, work to ensure supplies and keep prices stable, help businesses through difficulties, and bolster market confidence. We must accelerate implementation of more powerful combined measures on lowering taxes and fees, increase financial support, and strengthen support targeted at enterprises, especially manufacturing enterprises, small and medium-sized enterprises, and individually owned businesses. We also need to improve protection of intellectual property rights and create a business environment conducive to the development of enterprises under all types of ownership. 

Strive to facilitate smooth flows in our economy. 

In response to structural issues in economic operations, we must continue to pursue innovation-driven development, stick to the primary task of deepening supply-side structural reform, and focus on the implementation of structural policies as well as policies on science and technology. We need to make breakthroughs in key core technologies, overcome supply constraints, enhance the core competitiveness of the manufacturing industry, and also transform and upgrade traditional industries. We should encourage greater personal consumption and effective investment, remove obstacles in the chain of production, distribution, circulation and consumption, and quickly establish a new development dynamic.


Opening ceremony of the Beijing Stock Exchange, November 15, 2021. In 2021, China continued to deepen supply-side structural reform, furthered reforms to streamline administration, delegate power, improve regulation, and upgrade services, and accelerated reforms in key areas. PHOTO BY XINHUA REPORTER LI XIN 

Further unleash development momentum and potential. 

Given the urgent need to strengthen development momentum in the economy, we need to bolster the reform and opening up policy, deepen reform in key areas, and implement the pilot reform on the market allocation of production factors. We must also promote innovation in foreign trade, attract more foreign investment, and encourage the high-quality development of the BRI. 

Increase balance and coordination in development. 

In response to people's urgent needs and expectations, we must implement regional and social policies that coordinate urban and rural, regional, and socioeconomic development to ensure that people's basic needs are met. We must thoroughly implement major regional strategies and coordinated development strategies between regions, comprehensively promote rural revitalization, and improve the quality of the new type of urbanization. We need to increase employment assistance for key groups and guarantee supplies of daily necessities. We must implement city-specific policies to promote a virtuous cycle and healthy development of the real estate industry. We must also ensure the success of the new family-planning policy and respond positively to the challenges of an aging population. Finally, we must work together to overcome difficulties and strive to promote reasonable quantitative growth and steady qualitative enhancement of the economy. 

* The six fronts refer to employment, the financial sector, foreign trade, foreign investment, domestic investment, and market expectations. The six priorities refer to jobs, basic living needs, interests of market players, food and energy, industrial and supply chains, and the smooth functioning of primary-level governments. 

Ning Jizhe was Vice Minister of the National Development and Reform Commission, Commissioner and Secretary of the CPC Leadership Group of the National Bureau of Statistics, at the time this article was written. 

(Originally appeared in Qiushi Journal, Chinese edition, No. 3, 2022)