Growth mo­men­tum even stronger with re­forms

China Daily (USA) - - COMMENT -

Early this year, China watch­ers ex­pressed con­cerns that the coun­try’s econ­omy might start to weaken in the sec­ond quar­ter. How­ever, the lat­est data from the Na­tional Bureau of Sta­tis­tics show such con­cerns were un­founded, and the world’s sec­ond-largest econ­omy re­mains re­silient. The econ­omy ex­panded by 6.9 per­cent in the sec­ond quar­ter from a year ear­lier, the same as in the first quar­ter, ac­cord­ing to the fig­ures re­leased by the NBS on Mon­day. Even more en­cour­ag­ing, key in­di­ca­tors, such as in­dus­trial out­put and con­sump­tion, re­veal that im­prove­ments are be­ing made in ad­just­ing the coun­try’s eco­nomic struc­ture.

In­vest­ment in high-tech in­dus­tries, for ex­am­ple, in­creased by 21.5 per­cent, 12.9 per­cent­age points higher than over­all in­vest­ment growth, while re­tail sales of con­sumer goods grew 10.4 per­cent year-on-year, up from 10 per­cent in the first quar­ter. And the ser­vice sec­tor, which al­ready ac­counts for 54.1 per­cent of the over­all econ­omy, ex­panded 7.7 per­cent year-on-year in the first half of the year. Ac­cord­ing to the NBS, do­mes­tic con­sump­tion now ac­counts for 63.4 per­cent of GDP growth, which high­lights the progress China is mak­ing in its bid to make in­no­va­tion and do­mes­tic de­mand the driv­ers of eco­nomic growth.

Con­sid­er­ing that this per­for­mance has been achieved against the back­drop of ef­forts to re­duce ex­cess pro­duc­tion ca­pac­ity and cut cor­po­rate debt lev­els, the fig­ures are not only im­pres­sive, but also sug­gest the coun­try has man­aged to suc­cess­fully strike a bal­ance in its bid to pro­mote eco­nomic growth and re­struc­tur­ing.

Look­ing to the fu­ture, China will con­tinue to press ahead with its tasks of re­duc­ing ex­ces­sive pro­duc­tion ca­pac­ity, cut­ting real es­tate stocks, and low­er­ing cor­po­rate debt lev­els, while fur­ther strength­en­ing its en­vi­ron­men­tal pro­tec­tion and wa­ter con­ser­vancy ef­forts.

Al­though pol­i­cy­mak­ers will need to re­main alert to the pos­si­bil­ity of slower growth in the third quar­ter, there can be lit­tle doubt that the coun­try is on course to achieve its pre-set GDP growth tar­get of “around 6.5 per­cent” for the year.

With its growth tar­get at­tain­able, and the econ­omy main­tain­ing sta­ble and co­or­di­nated de­vel­op­ment, the lead­er­ship has more room to push ahead with eco­nomic re­struc­tur­ing and re­forms. Fi­nan­cial re­form, for ex­am­ple, is on the cards, af­ter the coun­try con­sol­i­dated its fi­nan­cial reg­u­la­tory power at the newly-con­cluded Na­tional Fi­nan­cial Work Con­fer­ence, which ended on Satur­day.

And fur­ther head­way in ad­vanc­ing the nec­es­sary re­forms will in turn make the Chi­nese econ­omy more ef­fi­cient, com­pet­i­tive and sus­tain­able in the com­ing years.

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