Economic picture continuing to improve

CRRC employees operate an assembly line of the company in Qingdao, Shandong province. [Photo by Zhang Jingang/For China Daily]

The quality and efficiency of China's economy has been improving as the country implements supply-side reform, according to official data.

China's industrial output expanded 7.2 percent year-on-year for the first two months, one percentage point higher than the growth rate recorded in December 2017 and 0.9 of a percentage point higher than the growth rate achieved over the same period in 2016, National Bureau of Statistics data showed.

Industrial output, officially called industrial value added, is used to measure the activity of designated large enterprises with annual turnover of at least 20 million yuan ($3 million).

Production in high-tech industries and the equipment manufacturing sector expanded by 11.9 and 8.4 percent, respectively.

Output of new energy vehicles surged 178.1 percent year-on-year during the first two months of 2018, while integrated circuit production picked up 33.3 percent and industrial robot production jumped by 25.1 percent, NBS data showed. In addition, the sales-output ratio of designated large enterprises came in at 97.9 percent.

In addition to the improved structure of the industrial sector, major industrial firms saw stronger profit growth in the beginning of the year.

Designated large enterprises posted profits of 969 billion yuan in the first two months, a 16.1 percent increase from a year earlier and 5.3 percentage points higher than the growth rate in December 2017.

Output of these companies' core business increased 10 percent year-on-year, 1.2 percentage points higher than the growth rate recorded in December 2017, while profit margin reached 6.1 percent, up by 0.33 percentage points year-on-year.

By the end of February, days in inventory of designated large enterprises decreased to 17.4 days, down by 0.2 days year-on-year and the average collection period for accounts receivable decreased to 47.4 days, 0.2 days shorter than a year earlier.

Their leverage ratio fell, too. By the end of February, the debt-asset ratio dropped 0.8 percentage points from a year ago, to 56.3 percent. The ratio for State-controlled enterprises dropped 1.4 percentage points, to 59.6 percent.

In the first two months, costs per 100 yuan of revenue gained from core business dropped 0.33 yuan from the same period last year, reaching 83.98 yuan.

While the industrial sector kicked off 2018 on a strong note, the service sector also showed a good outlook.

The service sector production index, a relatively new indicator first introduced by the NBS in March 2017 to show short-term changes in the service sector, registered 8 percent growth in the first two months, 0.1 percentage points higher than the growth registered in December 2017.

Output of designated service companies increased by 14.1 percent, up by 0.7 percentage points year-on-year and 0.5 percentage points higher than the national average growth rate in 2017.

A survey of 53,000 small and micro-sized firms showed in the first quarter of this year, 83.9 percent of them reported their operation is "good and stable", up by 1.6 percentage points year-on-year, the best performance in the last four years.

As both the industrial sector and the service sector posted better growth, the government also saw greater revenue.

In the first two months, the country's tax revenue increased by 18.4 percent year-on-year, up by 1.8 percentage points compared to one year earlier. In breakdown, domestic value-added tax increased by 22.3 percent, domestic consumption rate increased by 29.5 percent and corporate income tax increased by 14.8 percent.