The GDP is a major metric for measuring macroeconomic development. Photo: TUCHONG 

China’s Central Economic Work Conference, held in December 2023, stressed the importance of striking a balance between macro data and micro feelings. Properly managing the relationship between macroeconomic indicators and personal perceptions is important to developing an accurate understanding of the interdependency between the nation and individuals. Only by balancing macro data and individual expectations can confidence in the high-quality development of the Chinese economy be enhanced amid complex domestic and international landscapes, thus further consolidating and strengthening the momentum of China’s economic recovery. 

Continued macroeconomic recovery 

Since the 18th CPC National Congress, China’s economy has transitioned from the high-speed growth stage to a high-quality development phase. Economic upturns and new development trends are largely reflected in related macro data. 

As the largest developing nation in the world, China is also the only country in the world that possesses all the industrial categories listed in the United Nations industrial classification. The status of its macroeconomic development is primarily delineated by metrics like the Gross Domestic Product (GDP), value added to industrial enterprises above the designated size, and fixed asset investments, usually also including indicators like the Consumer Price Index (CPI), Producer Price Index (PPI), and surveyed unemployment rate in urban areas. 

Among these macro-level measures, China ranks top among major economies worldwide in terms of the GDP’s positive growth tendency and rate, showcasing macroeconomic progress amid stability and by extension, positive economic contributions to global growth. At constant prices, the GDP grew 5.3% year-on-year in the first quarter of 2024, demonstrating strong economic resilience. 

From the supply side, industrial enterprises above the designated size and more than 50% of major industries and products saw year-on-year expansion in terms of the value added, indicating steady growth of China’s industrial economy. By industry, the value added of agriculture (planting), industrial enterprises above the designated size, and the service sector rose 3.8%, 6.1%, and 5.0% year-on-year, respectively. 

On the demand side, total retail sales of consumer goods showed strong growth momentum, with outstanding performance in retail sales for both commodities and services. This reveals immense spending power in the unified national market and increasingly evident effects of domestic demand driving macroeconomic growth. 

In the first quarter of 2024, retail sales of consumer goods totaled 12.0327 trillion yuan, up 4.7% year-on-year. Fixed asset investments fared well, with nationwide investments (excluding agricultural households) increasing 4.5% from the previous year. Investments in high-tech manufacturing and services grew at notable rates of 10.8% and 12.7%, respectively, indicating ongoing improvements in investment drivers and structures for the current stage. 

Based on general price levels, the CPI rose slowly, indicating steady prices, particularly compared to the inflation experienced by some Western countries. From the perspective of international trade, total imports and exports of goods were flat year-on-year, while imports and exports in general trade exhibited positive growth. 

The above data shows that despite the US’s measures to re-shore manufacturing and “small-yard-high-fences” protectionist tactics, China has still managed to ensure stability in total imports and exports, especially through the 10th anniversary of the Belt and Road Initiative and the Sixth China International Import Expo, fully displaying the demeanor as a major country in world economic development. Additionally, grain output continued to grow in the first quarter of 2024. China has always prioritized food security to ensure that its people “keep the bowls in their hands.” 

In summary, China’s macro-economy is demonstrably expanding amid stability. This intuitive conclusion is not only supported by macroeconomic data, but it also reflects the current economic reality. 

Improving individual expectations 

On the micro level, China has a population of more than 1.4 billion and a middle-income group of over 400 million. Varying across regions, industries, and income levels, different groups make sense of overall macroeconomic figures and individual data differently. Micro data obtained from dividing a large population by macro indicators will be less impressive than the overall national performance. However, to some extent, individual-level data is indicative of people’s feelings about macroeconomic trends. Disparities regarding individual perceptions of China’s economic situation naturally  exist among those who participate in economic activities. The differences are obvious within certain groups, but mostly stem from individual epistemological differences. 

It is necessary to recognize that challenges facing China’s economic development are mounting, as the international situation becomes increasingly grim. Domestically, effective demand remains inadequate, and some industries are bothered by excessive capacity, which have weakened individual expectations. Growth in macro data attests to the nation’s economic recovery, but individuals don’t yet feel the overall upturn. 

In particular, the predicament ahead of private enterprises and employment pressure on the shoulders of youth like university graduates will affect personal assessments of the economy. Moreover, individual educational backgrounds, income levels, and spending and saving habits all bear on understandings of macro data, leading to a gap between macroeconomic figures and personal perceptions. 

Nevertheless, individual expectations on the micro level have been improving. Currently, China’s per capita GDP has surpassed $12,000. In the first quarter of 2024, the year-on-year nominal growth of per capital disposal income hit 6.2%, and the growth rates of wage income, net operating income, and net transfer income all approached or exceeded 5%, further solidifying individual confidence and expectations for economic development. 

Through the urban-rural lens, the growth rate of rural people’s per capita disposal income was approximately 2.4 percentage points higher than that of urban residents, which is of great significance to effectively unlocking consumption potential in rural areas and narrowing the urban-rural gap. 

Since the dawn of the new era, consumer demand has been upgrading, marked particularly by increasing demand for high-quality products and services. During the 2024 Qingming Festival holiday, which fell on April 4–6, per capita consumer spending by domestic tourists was 453.4 yuan, 101.1% that of the same period in 2019. In addition, per capita consumption expenditure on services has been soaring year-on-year, signaling a quick upgrade of Chinese residents’ consumption structure. Data shows that imports and exports of private enterprises, the principal subject of foreign trade, have maintained positive year-on-year growth. This also suggests that these enterprises are striving to get out of difficulties facing their development. 

A series of policy combinations have gradually reduced unstable and uncertain factors in economic activities, playing a pivotal role in stabilizing individual expectations and boosting their confidence in economic development. High-quality economic development calls for closer attention to public sentiment, in order to provide a stable and predictable environment for growth. 

Industries hold the key

Macro data provides a comprehensive and unfied view, while micro perspectives offer localized and varied insights, resulting in dual macro and micro viewpoints for analyzing economic development. 

In July 2023, Fu Linghui, a spokesperson for China’s National Bureau of Statistics, underscored the need to accurately decipher the “temperature difference” between macro data and micro feelings. Dialectically, the disconnect, and even deviation, between the two, is mainly owed to the comprehensive nature of macroeconomic figures in contrast with the locality of personal perceptions. Practical and effective measures should be rolled out for the economy, a macro whole, to rectify the misalignment, and full attention should be paid to balancing individual and national development when drafting development strategies. On the micro level, individuals should rationally understand the relationship between macroeconomic indicators and their own experiences as well as the “temperature difference” between the two. 

In practice, industries at the meso level can be leveraged to close the gap between macro data and micro feelings. Industries lie at the core of meso-level production relations and constitute an effective bond connecting the macro and micro dimensions. By accelerating the construction of a modern industrial system, the balance between macro data and micro feelings can be manifested by the contribution of the primary, secondary, and tertiary industries to economic development. 

Efforts are needed to build a pyramid structure for the modern industrial system with traditional industries as the foundation, pillar industries as the support, strategic emerging industries as the key, and cutting-edge industries as the direction, in a bid to expedite the cultivation and formation of new quality productive forces. Through industrial development, we can get a glimpse into steady macroeconomic growth, while focusing on micro-level individuals’ conditions and sentiment. The development of industries such as manufacturing, new energy, biomedicine, big data, and artificial intelligence can guide individuals to re-interpret macroeconomic data and analyze it with more reason, thereby lowering the impact brought by individual discrepancies and emotional reactions. 

Sense and sensibility are complementary. The perception of data requires a rational mindset. It is advisable to manage the relationship between macro data and micro feelings with industries as a bridge. Even if macroeconomic figures are summed up from micro-level individual experiences, it is unlikely to mirror all individuals’ characteristics or consider each person’s feelings. Furthermore, due to varying statistical sampling methods, some data cannot cover all groups, especially with respect to urban-rural disparities. This requires tolerance for the “temperature difference” between macroeconomic indicators and personal perceptions to strike a balance between individual and national development.

Shen Shen is a research fellow from the National Academy of Development and Strategy at Renmin University of China. 

Edited by CHEN MIRONG