Policy keeps economy on an even keel

Industry makes decent and steady recovery, demonstrating resilience

China will make efforts to enhance policy adjustments and strive to keep its industrial performance at a reasonable level as the nation is on track to meet its annual growth target despite mounting uncertainties, officials and experts said on Tuesday.

Luo Junjie, spokesman for the Ministry of Industry and Information Technology, said at a news conference in Beijing that China’s industrial economy has shown a steady recovery during the first three quarters, demonstrating strong resilience in the face of challenges posed by the sporadic resurgence of COVID-19, floods as well as complicated and changing situations both at home and abroad.

Citing key industrial indicators during the first three quarters, Luo said China’s industrial economy has maintained a recovery trend, showcasing the strong resilience and endogenous growth momentum of the economy.

Luo warned of challenges arising from mounting uncertainties such as the COVID-19 impact and the complicated situation at home, saying there are signs of a slowdown due to factors such as rising raw material prices, tight energy supplies and a chronic chip shortage.

“More efforts are needed to support the healthy development of small and medium-sized enterprises, maintain the stability of key industrial and supply chains and ensure industrial economic performance stays within a reasonable range,” Luo said.

In the next step, Luo said the country will make a big push to enhance policy adjustments, ease difficulties for enterprises and strive to meet the annual growth target.

The country’s total added value of major industrial enterprises grew 11.8 percent on a yearly basis during the first three quarters, and the average January-September growth rate in 2020 and 2021 stood at 6.4 percent, the ministry said.

Among the 41 industries surveyed, 39 witnessed year-on-year growth in added value in the first three quarters, and 21 saw doubledigit growth. Value-added industrial output for equipment manufacturing and high-tech manufacturing grew 16.2 percent and 20.1 percent, respectively, on a yearly basis during the January-September period.

Tang Jianwei, chief researcher at the financial research center of Bank of Communications, warned of increasing downside pressure in the fourth quarter and next year on the Chinese economy from weak domestic demand and slower industrial production.

“Macro policies need to be more proactive and a better job should be done to enhance cross-cyclical adjustments,” Tang added. “There’s still plenty of room for a proactive fiscal policy. Policymakers should pay more attention to structural adjustments and increase support for key fields and weak links.”

Louis Kuijs, head of Asia economics at Oxford Economics, said the think tank expects to see a shift in economic policy in the fourth quarter to support growth in the country. “Even with an easing of supply side pressures, however, we expect GDP growth will soften significantly in Q4, largely due to the real estate weakness,” Kuijs said. “In response, we think policymakers will take more steps to shore up growth, including ensuring sufficient liquidity in the interbank market, accelerating infrastructure development, and relaxing some aspects of overall credit and real estate policies.”