Nation: Economy fine despite July slowdown signs: official

Global economy, ‘adjustment,’ blamed for figures

Though China’s economic activity slowed in July, the domestic economy is still running in a stable and reasonable manner with encouraging signs, a Chinese government official said on Friday.

Sheng Laiyun, spokesperson of the National Bureau of Statistics, said at a press conference held by the State Council Information Office that several reasons accounted for the recent slowdown.

“On one hand, the recovery of the global economy is worse than expected. On the other hand, the domestic economy is at a critical period of adjustment, and is still facing downward pressure. Those factors have pressed on certain economic indicators in China recently,” he noted.

China’s investment sector continued to slide in July. The country’s fixed-assets investment growth slipped to 8.1 percent year-on-year from January to July from 9 percent in the January-June period, Sheng noted at the conference.

Analysts expected a 8.8 percent growth for July in this sector, Reuters said in a report on Friday.

“The investment returns on traditional industrial projects are very low currently, as the supply glut has put a lot of downward pressure on domestic industrial enterprises,” Dong Dengxin, director of the Finance and Securities Institute at Wuhan University, told the Global Times.

As a result, people are shifting their investment targets to the financial sector, such as equity investment, Dong said on Friday.

Meanwhile, investment in the private sector rose 2.1 percent year-onyear from January to July, down from 2.8 percent from January to June, Sheng said at the conference.

Sheng noted that pressure on domestic exports is increasing, suppressing the enthusiasm of some entrepreneurs in China.

China’s exports slumped 7.4 percent year-on-year to $1.17 trillion from January to July, data from the General Administration of Customs showed on Monday.

Dong said that to stimulate private investment growth, the government should roll out more fiscal policies, such as privileged tax policies for certain companies.

He added that monetary policies are not the right antidote as the liquidity level is not bad in China.

Separately, Sheng stressed that the domestic economy also showed some signs of improvement in July.

For example, the growth of the service sector continues to outpace that of the traditional industries in July, Sheng noted, adding that new industries are also growing at a fast pace, such as new-energy automobiles and online shopping.

Dong nevertheless noted it will take some time for the new industries, many of which involve highend technologies, to replace traditional industries as the main driving force of economic growth. “There still isn’t a mature market for the high-tech companies,” he noted.