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Momentum of economy to pick up pace

Ouyang Shijia
Updated: Jul 15,2022 13:50    China Daily

China's economy will likely continue to rebound in the second half of the year, and the country will keep economic performance within a reasonable range, the country's top economic regulator said on July 14.

Although the economy is facing downward pressures and uncertainties at home and abroad, experts said the momentum of China's growth will gather pace in the second half, as the economy will continue to draw support from stimulus policy this year.

They said the country should strengthen cross-cyclical and countercyclical adjustment, and China still has sufficient policy tools and plenty of room to step up fiscal and monetary easing to shore up growth.

Yuan Da, director of the Department of National Economy at the National Development and Reform Commission, said China would likely maintain growth momentum in the second half as a package of stimulus policies takes effect.

He told a news briefing held in Beijing on July 14 that the growth has firmed up despite shocks at home and abroad, showcasing the strong resilience of the economy and its huge potential.

"The sustained and healthy development trend of China's economy has not changed, the necessary production factors for high-quality development remain unchanged, and the fundamentals of China's long-term sound economic growth remain unchanged," he said.

China's economy is gradually recovering from a slowdown amid resurgent domestic COVID-19 cases and a complicated and grim international environment since March, with improvement in some indicators.

Data from the National Development and Reform Commission showed that China's power output jumped 4 percent year-on-year in June. On July 13, power generation hit a record high of 27.854 billion kilowatt hours, pointing to a notable pickup in demand, according to the NDRC.

Despite the notable improvement, Luo Zhiheng, chief economist at Yuekai Securities, warned of downward pressures and challenges from shrinking demand, supply shocks and weakening expectations, calling for more efforts to strengthen cross-cyclical and countercyclical adjustment.

The country has strengthened efforts to stabilize the economy, as the State Council, China's Cabinet, unveiled 33 measures in May covering fiscal, financial, investment, consumption and industrial policies to prop up growth.

Compared with the soaring prices in major economies such as the United States, China's inflation level remains stable, leaving room for more policy stimulus to shore up growth.

China's consumer price index, the main gauge of inflation, rose 2.5 percent year-on-year in June. Meanwhile, inflation reached a more than 40-year high in June in the United States, as the CPI there rose 9.1 percent year-on-year, according to the US Bureau of Labor Statistics.

Despite uncertainties and pressures from high inflation overseas, geopolitical tension and the pandemic, China has the confidence and capabilities to keep prices within a reasonable range and meet the consumer inflation target of around 3 percent for 2022, said Wan Jinsong, director of the NDRC's Department of Price.

In the next step, the NDRC will closely monitor overall price levels and changes in key commodities' prices, and strengthen regulations over the market, Wan said.

Citing the NDRC's recent meetings to crack down on illegalities and irregularities such as price gouging, Yin Yue, a macroeconomic analyst at Shanghai-listed Hongta Securities, said there is insufficient room for further hog price gains in the coming months, and China's relatively stable prices level leaves room to step up macro policy support.