Great start to economic recovery in capital

Beijing's gross domestic product rises more than 3 percent in first quarter, thanks to investment and local residents' increased spending

Official figures for the first quarter of this year indicated that the economy of Beijing rebounded positively from the negative effects of the COVID-19 pandemic. Active investment, increased consumer spending and many emerging industries are displaying remarkable vitality.

According to the latest statistics, Beijing's GDP increased by 3.1 percent year-on-year to 994.8 billion yuan ($143.6 billion) from January to March. It exceeded the growth rate of the whole of 2022 by 2.4 percentage points — a "hard-won result" described by Zhu Yannan, spokesman for the Beijing Bureau of Statistics.

The service industry of Beijing demonstrated a stronger recovery in the first quarter with an increase of 4.6 percent year-on-year.

Specifically, information and communications, software and information technology service industries achieved an incremental value of 213.5 billion yuan, up 12 percent from 2022. Meanwhile, the incremental value of the financial industry surged 6.1 percent to roughly 207 billion yuan. These two categories contributed 42.3 percent of Beijing's GDP, up 2.3 percentage points.

The face-to-face service industry, which was significantly affected by the pandemic, recorded an upturn from negative growth in three major categories during the first three months.

The three categories of accommodation and catering; transportation, warehousing, and postal services; and the culture, sports and entertainment industry, surged 11.6 percent, 6.9 percent and 3.6 percent, respectively, from the corresponding period of 2022.

Though the city's secondary industry declined 6 percent year-on-year, its decrease in industrial incremental value narrowed by 9.3 percentage points compared to the whole of 2022, according to the official statistics.

A total of 26 out of the 37 industries sectors in Beijing have shown improvement with some of the emerging industries displaying remarkable performance.

The data indicated that sectors including specific equipment for semiconductor devices, new energy vehicle manufacturing, and high-speed rail equipment and components manufacturing grew rapidly.

The production of new energy vehicles, environmental pollution prevention equipment and wind turbine generators increased by 120 percent, 44 percent and 36.4 percent, respectively.

Driven by the acceleration of projects in integrated circuits, cloud computing and communication, the investment in high-tech manufacturing and high-tech services in Beijing surged 22 percent and 42.6 percent, respectively, in Q1.

As a whole, fixed asset investment in the city rose 9.6 percent year-on-year.

Along with the improving economy, consumers in the city were more willing to spend in Q1, especially in areas related to health, culture and tourism.

Healthcare spending by Beijing residents climbed roughly 13 percent, leading the way among the eight major categories of consumption. Spending on medicine and medical services rose 79.8 percent and 3.9 percent respectively, while spending on fitness equipment rose by 10.4 percent. At the same time, cultural tourism has stimulated new consumer activity, with cultural and entertainment spending by Beijing residents increasing by 17.5 percent from the same period of 2022, a rise of 15 percentage points.

Group travel and ticket purchases for tourist attractions also increased by 3.6 times and 25.2 percent respectively. In addition, spending on flights, long-distance buses and trains rose 2.7 times, 4.3 times and 5.1 times respectively.

Despite challenges, Zhu said Beijing is well-positioned to continue its positive momentum and maintain steady economic growth throughout the year.

"In the next stage, the development of the national economy will provide a favorable environment for the recovery of the Beijing economy," Zhu said. "The trend of economic recovery and improvement is expected to continue and accelerate."