BEIJING — Although downward pressure on the economy may persist for a while, the Chinese government has plenty policy room and options to achieve its annual growth targets, the country’s top economic planner said on Sept 22.
“China’s economy will continue to operate within a reasonable range in the latter half of the year, the overall stable momentum will not change and annual growth is expected at around 7 percent,” the National Development and Reform Commission said in an online press release.
With a cooling property market and falling external demand amid tepid global recovery, China’s economy has hit a soft patch, growing only 7 percent in the first six months, the slowest pace in nearly a quarter of a century and a far cry from the double-digit expansion in previous decades.
In addition, fresh pressure from capital market volatility this summer, currency devaluation in emerging markets, and slumping global commodity prices are further muddying growth prospects.
The current slowdown is natural. The factors that have underpinned bottleneck growth in the past, such as the large amount of working-age population and hefty resources, have undergone significant changes, Zhong He from the agency’s policy research office wrote in the release.
Within a global context, China’s growth remains among the top of the world, and the government’s ongoing reform steps will keep injecting new impetus to the economy to ensure steady growth, according to the statement.
It cited growing enthusiasm for innovation and entrepreneurship, improving economic structure in which consumption and the service sector are playing a bigger part and progress in urbanization as positive signs in the economy.
In the first half of the year, consumption contributed to 60 percent of GDP growth for the period and emerging consumption models like online shopping accounted for nearly 10 percent of retail sales.
In the following months, China’s investment-stimulating policies will help stabilize investment growth to offset the impacts of sluggish exports, and the recovering property market and booming service industry will also contribute to growth even though difficulties for traditional industries will persist.
That being said, China will see an increase of jobs and mild inflation in coming months, and major growth targets for 2015 will be realized, said the statement.