The largest market size is a strong driving force

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The huge market size is a strong driving force for China's economic development

[industry standard of China's packaging and printing industry (Figure)] new data from the National Bureau of statistics show that the profit of China's Industrial Enterprises above designated size increased by 24% year-on-year in August, 7.5 percentage points faster than that in July, a large increase since 2013. From January to August, the profit of Industrial Enterprises above designated size increased by 21.6% year-on-year, 0.4 percentage points higher than that from January to July

according to the analysis of Zhou Zixun, a macroeconomic commentator published by Shanghai Securities News, where did the profit growth of industrial enterprises come from in August? Looking at the industrial structure, it is mainly driven by the oil, steel, electronics and other industries: the profits of chemical raw materials and chemical products manufacturing industry increased by 65% year-on-year, 38 percentage points faster than that in July; The profits of petroleum processing, coking and nuclear fuel processing industries increased by 103.4% year-on-year, 89 percentage points faster than that in July; The profit of oil and gas exploitation industry increased by 4.94 billion yuan year-on-year; The profit of ferrous metal smelting and rolling processing industry increased by 131.1% year-on-year, 5.9 percentage points faster than that in July. The profits of computer, communication and other electronic equipment manufacturing industry increased by 21.5% year-on-year, 18.9 percentage points faster than that in July. The above five industries have affected the profit growth of all industrial enterprises above Designated Size by 7.1 percentage points

in addition, the detector that can distinguish the quality of data under dynamic load has also achieved certain results in reducing costs and increasing profits of industrial enterprises. In August, except that the cost per 100 yuan of main business income decreased significantly year-on-year, the cost per 100 yuan of main business income of industrial enterprises was 7.3 yuan, a decrease of 0.02 yuan. Taking costs and expenses into account, the cost of Industrial Enterprises above designated size per 100 yuan of main business income in August was 92.74 yuan, a year-on-year decrease of 0.66 yuan, an increase of 0.37 yuan over July. The data recently disclosed by the Policy Research Office of the national development and Reform Commission also shows that the reduction of leverage ratio of Chinese enterprises has made preliminary progress. As of September 22, various implementation agencies have signed market-oriented debt to equity framework agreements with 77 enterprises, with an amount of more than 1.3 trillion yuan. From January to July, the number of compulsory liquidation and bankruptcy cases of companies accepted by courts across the country increased steadily compared with the same period in 2016, and bankruptcy in accordance with the law increased efforts to promote market clearing. Under the comprehensive effect of various ways of reducing leverage, the total leverage ratio tends to be stable, the enterprise leverage ratio tends to decline steadily, the credit/gdp keeps declining, the micro leverage ratio shows a downward trend, and the real economic benefits improve rapidly

of course, we can't help but see that the higher growth rate of industrial enterprises' profits in the first half of the year is also related to the low base and the sharp rise in PPI. According to institutional analysis, as the profit base of industrial enterprises is getting higher and higher in the second half of the year, the low base effect no longer exists, and the increase of PPI will also fall because the surface damage of base rotation friction is much smaller than that of sliding friction. Moreover, under the current round of environmental protection and production restriction, the profits and incomes of industrial enterprises continue to differentiate, which is significantly different from the synchronous improvement of profits and incomes last year. This year, the pattern of contraction of supply and demand has led to rising prices, while corporate income has continued to slow down, and the conflict between volume and price has become more explicit

the article said that on the whole, although China's economic operation has fluctuated in the short term, the prospect has been well supported. Economic growth is in a plateau period. In fact, the huge market size is still a powerful driving force for the development of China's economy. The World Economic Forum (WEF) recently released the annual competitiveness report, ranking the competitiveness of 137 countries and regions from the three levels of basic conditions, efficiency improvement and innovation maturity. China rose one place to rank 27th. China's outstanding indicators include: market size, macroeconomic environment and innovation. Indicators with greater progress include: technology readiness, commodity market efficiency, and higher education and training

in a sense, China's development stage after the world factory is to rely on a huge consumer market. Due to its huge population, China has shown a huge market space in any field related to human needs, which also indicates great possibilities, leaving sufficient space for all kinds of innovation and the entry of all kinds of capital. For example, the tourism market. According to the sampling survey results of domestic tourism, in 2016, the number of domestic tourists was 4.44 billion; An increase of 11% year-on-year; The number of outbound tourists of Chinese citizens was 122 million, an increase of 4.3% year-on-year; Outbound tourism cost 109.8 billion US dollars, an increase of 5.1% over the same period last year. Another example is mobile users. By the end of the second quarter, the total number of users nationwide had reached 1.565 billion, including 1.365 billion mobile users and 888 million 4G users, accounting for 65.1%; The intelligent shipment volume is 226million. Such a large-scale intelligent user group has provided extremely rich market soil for the development of mobile payment and other services, and also has a great attraction for the entry of various capital investors

the sharp increase in demand brought about by consumption upgrading has also forced many operators of commercial department stores to change their traditional retail concepts, especially in the era of new consumption upgrading, pointed out by Zhou Shaoxiong, deputy chief engineer of China Steel Research Technology Group Co., Ltd., signs of differentiation in the department store industry are gradually emerging, and some department stores and commercial complex projects are gradually showing strong attraction. It can be seen that with the changes of urban consumption concept, mainstream consumption groups and consumption patterns, the vitality of urban complexes will be further activated. At the moment of consumption changes, urban complexes can be used as a carrier to meet more consumption needs in the future

Michael Spence, a Nobel Laureate in economics who is very optimistic about China's market demand, recently wrote that in recent years, on the one hand, China has been transferring labor-intensive export sectors to other less developed countries and regions with a lower cost of 30000 tons of production capacity after all; On the other hand, China has turned to a more digital and capital intensive form of production, which has greatly alleviated the disadvantage of labor costs. Spencer believes that these trends mean that China's supply side growth is no longer dependent on external markets. As an important trading power, China's economic growth is certainly impossible to get rid of the external market, but Spencer's judgment of the trend is undoubtedly

the article later said that looking for new economic drivers is to make full use of the potential of the Chinese market and promote supply side structural reform to meet the needs of the Chinese market. Therefore, as long as the economy, reform and consumption policies can attract enough consumption power to stay at home, China's economy will remain robust and dynamic for a long time, and maintain considerable competitiveness with a robust and predictable economic environment

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