By Chu Daye and Qi Xijia
Officials from China's top economic planner have reaffirmed the good recovery momentum of the Chinese economy on Tuesday, one day after key economic data was published on Monday, injecting a confidence booster to market entities amid the "slowdown" hype by Western media.
China has the confidence, conditions and capability to reach its GDP growth target for 2023, along with the manifestation of existing and later-on macroeconomic policies, continuously improving the economic structure and forming new growth drivers, Li Hui, an official with the National Development and Reform Commission (NDRC), told a press conference on Tuesday. Li noted that China's economy made a good start in the first quarter of 2023 and continued to recover in the second quarter.
China has the greatest potential for consumption in the world, with strong demand for investment in public services, infrastructure and other areas, and its export products and services are increasingly competitive, Li said, pointing out that positive factors that promote overall economic improvement are accumulating.
At the same time, NDRC officials acknowledged challenges from a complex global political and economic situation and an "unsolid" foundation for continued recovery and development.
The world's second-largest economy grew at 5.5 percent for the first half, data from the country's National Bureau of Statistics showed on Monday. However, quarter-over-quarter growth only came in at 0.8 percent, down from the 2.2 percent growth seen in the first quarter, as the economy faces multiple domestic and external challenges including weak consumer sentiment, high youth unemployment and debt issues.
Foreign media outlets highlighted the second-quarter growth as frail, and pointed out that pressure on Chinese policymakers is mounting as they walk a tightrope between keeping the economic recovery on track while avoiding aggressive stimulus that could fuel debt risks.
US Treasury Secretary Janet Yellen also weighed in, saying China's economic slowdown "risks causing ripple effects across the global economy," though she does not expect a recession in the US, according to Bloomberg.
Still confident
Chinese economists and analysts said that while the economy faces challenges, the overall outlook remains positive and the country is highly likely to achieve its targeted growth rate.
China has set a GDP growth target of around 5 percent for 2023.
Wan Zhe, an economist and professor at the Belt and Road School of Beijing Normal University, told the Global Times on Tuesday that the Chinese government has a sober awareness of the difficulties it has to face in the second phase of the recovery, and is actively coping with prompt actions being rolled out in succession with an astute grasp of the situation. "The Chinese economy may benefit from opportunities as the country rises up to tackle challenges," Wan said.
Globally, despite persisting challenges, China's growth outlook for 2023 was still among the best among the major economies, economists noted.
The German economy, the powerhouse of the EU, entered a technical recession, and the US economy is still far from climbing out of the shadows of inflation.
Some Chinese experts highlighted China's growth engines that have been ignored by foreign media.
Chen Jia, an independent analyst on global strategy, told the Global Times that foreign media has for a long time ignored the ample policy and development potential in China's emerging strategic industries, which has been nurtured by the Chinese government through years of efforts.
"Potentials in economic drivers such as the new generation of powerful artificial intelligence, once unleashed, will provide sustained growth drive for consumption," Chen said.
"China's innovative macroeconomic policy tools are completely different from those of Western countries, something Western media have failed to understand," Chen said.
China will formulate and introduce more effective policies for restoring and expanding consumption as soon as possible, according to Jin Xiandong, another NDRC official.
Efforts should also be made to increase residents' incomes through various channels, stabilize employment and expand more scenarios for consumption, Jin noted.
On Tuesday, the Ministry of Commerce and other related departments rolled out 11 measures to boost the consumption of household appliances, promote green, intelligent and senior citizen-friendly consumption.
More stimuli could be in the pipeline to further rev up the recovery momentum in the second half, on top of existing measures such as lowering of borrowing and lending rates, experts said.
Wan predicted that new growth drivers in the next phase may include consumption at the high-end, high-quality items amid a consumption upgrade, vibrant business in lower-tier cities and rural areas, and green consumption.
Bottoming out
Analysts said that as China moves swiftly to tackle economic challenges, and the economic structure further improves with new growth drivers gaining momentum, and improved incomes, confidence will gradually recover. Some pointed out that Chinese economy may have already seen the worst phase or is in the process of bottoming out.
Zhou Maohua, an economist with China Everbright Bank, believes that the second quarter could be the economic bottom for the entire year given the pace of economic recovery, and that stronger momentum is expected in the second half of the year.
"Considering the time lag for pro-growth policies to take effect, there is a possibility of continued recovery in consumer spending. Domestic macroeconomic policies are expected to be moderately strengthened," Zhou told the Global Times on Tuesday.
The NDRC and other Chinese ministries have recently increased their outreach to private Chinese companies, as well as foreign firms. Three meetings were held by NDRC chairman Zheng Shanjie with private entrepreneurs in July to listen to their feelings and suggestions, and the top economic planner vowed to turn these meetings into a regular mechanism.
"I see these frequent meetings with private enterprises as positive messages for the private sector," the owner of an electric instrument set company in East China's Zhejiang Province, surnamed Xu, told the Global Times on Tuesday.
"Support from the government is our best motivation," Xu said, noting that she is hoping for more favorable conditions for small and micro enterprises, such as discounts on rents. "Stabilizing operating venues gives us guts."
A research paper from China Securities pointed out that China's GDP growth rate is expected to slightly recover in the third and fourth quarters after reaching a low point in the second quarter.
The paper predicted annual GDP growth at 5.4 percent, citing improved employment, residential consumption and profit margins from companies.
Analysts said the US cannot shake off its responsibility for having slowed China down, with its crackdowns and containment that had caused key trade in items such as chips to contract.
This article originally appeared at globaltimes.cn