Fresh official data shows that China’s economic growth in the first half of 2016 remained stable within the government’s target growth range. A series of other numbers released on July 15 by the National Bureau of Statistics also showed continuing structural changes in China’s economy.
China’s latest financial data beat expectations as the world watched to see if the country could continue its rapid growth and most forecasts were skewed towards pessimism. China’s GDP grew 6.7 percent in the first half of 2016, the same speed as in the first quarter.
Sheng Laiyun, spokesman of national bureau of statistics, said, “China has kept stable growth. We know that in the same period last year China grew 7 percent. But if you look at the size of the growth volume, 6.7 percent growth in 2016’s first half actually produced 23 billion yuan more in terms of growth volume than the 7 percent last year.”
“The government has set a target range of 6.5 to 7 percent growth for this year. Medium to high-speed growth within that range is crucial for avoiding systemic risks and provides much needed support for an entire range of reforms that are currently underway,” said Yang Chengxi, CCTV’s reporter.
China aims to realize structural changes in its industry structure while maintaining stable growth. Industrial output from January to June expanded 6 percent. That was higher than expected. Within the categories, high-tech and equipment manufacturing both grew substantially higher than average. That’s a structural trend that experts say they like to see.
On the other hand, investment in China is causing concerns. Fixed-asset investment growth 9 percent year on year, trailing forecasts. Experts say what’s worrisome about that is that private investment growth slipped to 2.8 percent.
Sheng said, “Investment confidence is low, because the investment threshold is too high, and that it is still hard for small private companies to secure financing.”
Experts say that because private investment is down, public infrastructure investments might have to be beefed up to counter the gap.
Cai Junyi, chief analyst of Shanghai Securities, said, “Based on my analysis, China will increase efforts in its fiscal policy and support infrastructure building. It will also do whatever is suitable to support private investments.”
The NBS spokesman said there’s also a positive side. While investments in traditional sectors fell, those going into the services sector kept increasing at a double-digit rate. At the same time, an ongoing fall in producer prices in China is also helping companies increase their margins going forward.