Economy to Remain in a Reasonable Range

the world’s most potential consumer market, its per-capita GDP is reaching $10,000, and the middle-income population has surpassed 400 million. All these are essential to cope with changes in the external environment.

China has a complete industrial system, the proportion of hi-tech industry is rising, and new growth drivers are being added. A large pool of skilled workers is also an important part of its competitive edge. In addition, there is a great deal of space for investment, with considerable opportunities in new-type infrastructure, public service facilities and environmental protection.

Finally, counter-cyclical adjustments are increasing. The Central Economic Work Conference remarkably intensified efforts to ensure stable growth, and various counter-cyclical adjustment measures have been put in place.

For instance, the Central Government has issued transfer payment quotas of more than 1.8 trillion yuan ($265.88 billion) and allowed local governments to issue an additional 1.39 trillion yuan ($205.32 billion) in bonds.

It is expected that the deficit rate target and the annual quotas for local government debt issuance to be approved at the upcoming annual session of the National People’s Congress, the national legislature, will be higher than in previous years.

Due to external uncertainties, it is hard to project how China’s exports will fare in the future. In the domestic market, as real estate control has not been relaxed and the leverage ratio of residents is dipping, both investment and sale in the real estate sector are likely to slow down this year. However, all these factors are under government attention, so they will not cause unexpected negative impacts.

Despite the complex external environment and increasing difficulties and more downward pressure, China’s economic fundamentals still have potential, and policies are being readjusted. As all these become effective, the economy will hopefully see improvement in the third quarter and operate within a reasonable range throughout the year.