BEIJING — Despite moderating investment and growing trade protectionism, China’s economy has maintained solid growth momentum, economic officials said.
In the first four days of the week-long National Day holiday which ended on Oct 7, Chinese consumers have set record highs in daily data, with more than 100 million people traveling across China and approximately one million Chinese taking leisure trips overseas, posting a tourism revenue of more than 100 billion yuan.
In a longer perspective, the boost given by consumption to the Chinese economy has been significant. In the first half of the year, for instance, consumption contributed to 78.5 percent of the country’s economic expansion, up 14.2 percentage points from the same period of last year.
From January to August, China’s total retail sales of consumer goods have exceeded 24 trillion yuan, with the monthly consumption exceeding three trillion yuan for four consecutive months.
Meanwhile, the country’s online retail sales rocketed by 28.2 percent to 5.52 trillion yuan during the first eight months, while the summer box office from June to August rose to 17.4 billion yuan.
Lu Shan, a senior statistician with the National Bureau of Statistics (NBS), said that China’s consumption market has been expanding steadily.
The growth of fixed-assets investment, another main engine of the Chinese economy, also showed new positive trends.
On the whole, China’s fixed-assets investment from January to August has grown at a slower rate of 5.3 percent, down by two percentage points from the same period last year.
But in a breakdown analysis, NBS statistics showed the slowdown was mainly triggered by construction investment. Private investment, however, has expanded by 8.7 percent, 3.4 percentage points higher than the national average, while manufacturing investment has continued to rise for five consecutive months.
As the slowdown in construction investment was mainly caused by the shortage of capital, the Ministry of Finance has urged local governments to speed up the issuance of special bonds of 1.35 trillion yuan to sustain the financing for projects under construction.
NBS spokesperson Mao Shengyong said that a number of construction projects involving infrastructure facilities conducive to improving people’s livelihood and enhancing the potential for economic development would be started soon.
To stabilize investment, China wanted to channel capital into where it was most needed such as agriculture, poverty alleviation and environmental protection.
As for exports, the third key engine of China’s economic growth, China has become significantly less vulnerable to external uncertainties.
Official statistics showed that the country’s foreign trade dependence degree, the ratio of total amount of foreign trade to the country’s gross domestic product (GDP), has fallen from 64 percent in the year 2000 to 33.5 percent in 2017.
Only 19 percent of China’s exports went to the US in 2017. The $250 billion Chinese exports subject to higher tariff duties imposed by the US account for less than two percent of China’s total GDP.
Long Guoqiang, deputy director of the Development Research Center of the State Council, said that the risks from trade frictions with the US were “controllable” to China’s overall exports and China’s economic growth.
Fu Ziying, vice-minister of commerce, said despite the trade frictions, stable progress was being made in China’s foreign trade.
Chinese products have so far been exported to 231 countries and regions. Five years after China proposed the Belt and Road (B&R) Initiative, the country’s foreign trade with the B&R countries has exceeded $5.5 trillion.
Moreover, China posted a GDP growth rate of 6.8 percent in the first half of year, which has remained between 6.7 percent and 6.9 percent for 12 consecutive quarters.
With more than 10 million new jobs created in the first eight month, the country has seen a relatively low surveyed urban unemployment rate of five percent.
Consumer prices remained mild during the same period with a growth rate of 2 percent, while the foreign exchange reserve continued to stay strong, registering more than $3 trillion at the end of September.
With such sound economic fundamentals, the Chinese government has more maneuvering room to facilitate its economic transformation for high-quality development.
On Oct 7, the People’s Bank of China (PBOC) decided to cut the reserve requirement ratio (RRR) for RMB deposits by one percentage point starting from Oct 15 to optimize the liquidity structure of commercial banks and the financial market and to reduce financing costs.
The PBOC said it will continuously implement a prudent and neutral monetary policy, refrain from using a deluge of stimulus and focus on targeted adjustment to maintain sound and sufficient liquidity.
Some of the liquidity unleashed will be used to pay back the 450 billion yuan of the medium-term lending facility that will mature on Oct 15.
In addition, the liquidity of another 750 billion yuan will be injected into the market to support small and micro enterprises, private enterprises and innovative enterprises to enhance the vitality and resilience of the Chinese economy, strengthen endogenous growth momentum and promote the healthy development of the real economy, it said.