Amid structural shifts, economy stays resilient

DESPITE mounting external uncertainties, China’s economy remained resilient with a sustainable growth pattern that will help it meet its growth target for the year.

The country’s gross domestic product expanded 6.8 percent year on year in the first half of 2018, well above the government’s annual growth target of around 6.5 percent, data from the National Bureau of Statistics showed.

In Q2, China’s GDP rose 6.7 percent year on year, the 12th straight quarter the GDP growth rate has stayed within the range of 6.7 to 6.9 percent.

At a time when rising protectionism dampens global growth prospects, such strong performance is a hard-won result that proves the effectiveness of government-led structural reforms.

A closer look at the economic data for H1 showed that China’s growth is less reliant on exports and more dependent on internal factors such as consumption and entrepreneurship.

Final consumption contributed 78.5 percent of the economic expansion in January-June, up from 58.8 percent for the whole year of 2017, according to NBS data.

The almost 20-percent hike didn’t tell the whole story. A rising middle class is fueling demand for high-quality and innovative products, boosting sectors including tourism, culture and health care.

As consumption contributes more and more to economic growth, China’s economy will likely remain stable in the short term, CITIC Securities said in a research paper.

Entrepreneurship and innovation are also providing sustained support for the economy. In the past five years, the number of market entities increased by 80 percent, reaching over 100 million. In H1, nearly 10 million new market entities were added, up 12.5 percent year on year.

High-tech sectors, as well as strategic emerging industries, registered stellar performance in H1, with the increase of output in these sectors all outpacing average industrial output growth.

Thanks partly to the structural improvement, China is confident and capable of achieving its annual growth target, according to Yan Pengcheng, spokesperson for the National Development and Reform Commission.

Years of economic transformation has turned China into an economy mainly driven by consumption, services and domestic demand instead of investment and exports, which will provide support for China’s future economic development, Yan said.

Meanwhile, China has experience in managing risks and challenges from previous financial crises, as well as sufficient room to adjust policies to cope with shocks from uncertainties in the world economy, he said.

In the second half of the year, China will make macropolicies more flexible and coordinated to keep economic fundamentals stable, Yan said, pledging to further unlock domestic demand, push forward reform in key areas, improve the business environment and continue opening-up.

“We have the confidence, strength, and conditions, and we are capable enough to counter uncertainties in the world economy with certainties from China’s economic resilience and sustainability,” Yan said.