Reforms Prop up

China’s economy grew 6.9 percent in the first half of 2017. This figure somewhat reduces the worry that China’s economic slowdown will cast a shadow over the world economy. In the past two years, the rhetoric about the collapse of China’s economy has continued to resurge from time to time. However, the economic growth of the past one and a half years shows a steady and upbeat momentum.

The Chinese Government’s deepening of reform and innovation efforts as well as the supply-side structural reform are essential for the upward trend of China’s economy.

In the first half of this year, a lot has been achieved in terms of supply-side structural reform, with excess capacity being reduced in an orderly manner, real estate sector seeing continuous reduction in housing inventory and enterprises’ leverage ratios and production costs being further lowered. Weak links were also bolstered in the first half: The growth of investment in certain sectors—environmental protection and management, water management, transport, storage and post service, and education— have all surpassed the growth of fixed asset investments over the same period.

The supply-side structural reform has improved the structure of China’s economic growth. In the first half of 2017, domestic demand’s contribution to the economy reached 96.1 percent, while consumption became the major engine of China’s economic growth. This is good news for the rest of the world.