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Harbingers of economic expansion seen

Zhou Lanxu
Updated: Mar 13,2019 8:50 AM     China Daily

Positive signs in the Chinese economy have been appearing since the beginning of the year, said a senior official and experts on March 12.

“The economy has been stable and has shown improving momentum from the beginning of 2019,” Ning Jizhe, head of the National Bureau of Statistics, said on the sidelines of this year’s two sessions in Beijing.

Ning said his remarks were based on currently available economic data from the January-February period, and the NBS is still working on more comprehensive data scheduled to be released on March 14.

Specifically, the first two months of the year saw an overall steady expansion in production, consumption and trade, as well as stable price levels and employment, Ning said. Market expectations have also brightened, as signaled by the stock market uptrend since the beginning of the year.

More positive signs have appeared in March, with the daily volume of electricity sold by the country’s major power supplier State Grid Corp rising 11 percent year-on-year, Ning said.

Xu Gao, chief economist at Everbright Securities Asset Management Co, said improving leading indicators may signal more robust economic growth this year.

Aggregate social financing increased by 703 billion yuan ($105 billion) year-on-year in February, the People’s Bank of China, the central bank, said on March 10.

The structure of social financing saw a notable improvement in February, Xu said.

“The amount of long-term financing has continued to accelerate its growth pace in February. This has delivered a clear signal that the economy is about to hit bottom and pick up.

“It seems that supportive macro policies have begun to boost domestic demand,” Xu added, citing structural improvements in another key leading indicator, the purchasing managers index, for February.

China’s macro policies this year will consist of a prudent monetary policy featuring countercyclical adjustments and strengthened support for private and small businesses, as well as a proactive fiscal policy prioritizing cuts in taxes and fees, authorities said during the ongoing two sessions.

Underpinned by the above policies, the country aims to achieve a GDP growth rate between 6 and 6.5 percent this year, the Government Work Report said. Ning said this growth target is the most robust among major economies, and is a reasonable expectation.

China managed to achieve a 6.6 percent GDP growth rate last year despite external uncertainties and pressures from economic restructuring, the NBS said.

“China’s GDP data are scientific, reliable and comparable with other economies, a fact that has been recognized by major international organizations such as the United Nations and the World Bank,” Ning said.

After years of reforms, China’s national accounting system is now in line with international standards, and has made cutting-edge advances in statistical work with regard to the new economy, said Ning.

“For 2019 and several years ahead, the key for China to maintaining stable growth and employment lies in optimizing supply structures and stabilizing domestic demand,” said Tang Yao, an associate professor at Guanghua School of Management at Peking University.

“Domestic market entities need to be further vitalized by deepening reforms,” Tang said, adding that tax cuts and accelerated infrastructure investment are expected to stabilize the economy this year.

“It still takes a while for effects of supportive macro policies to be fully reflected in economic data,” Tang said.