Amid downward pressure, the Chinese government will adopt more targeted measures and fine tune economic policies to stabilize growth in the second half of this year, according to the nation’s top economic regulator.
The move is expected to prevent short-term fluctuations turning into a major downturn, said Ning Jizhe, a vice-chairman of the National Development and Reform Commission.
“Some economic indicators in July, such as investment and consumption growth, reflected some fluctuations in the economy. But overall economic growth remained within a reasonable range,” Ning said. “Facing rising challenges, we will pay more attention to the fluctuation of these indicators and make sure short-term fluctuations will not turn into a downward slip.”
Weighed down by strict environmental regulation of the manufacturing sector and financial shortages at some local levels, a number of key indicators registered slower-than-expected growth in July, according to the National Bureau of Statistics.
Also, the trade dispute between China and the United States has not made things easier, disrupting exports, domestic demand and the yuan’s exchange rate, Ning added.
Despite some concern that the economy faces a bumpy second half, Ning said there have been no signs of a recession, and overall economic fundamentals remain sound.
In the first six months, the economy attained 6.8 percent year-on-year growth. From January to July, 8.8 million new jobs have been created nationwide, about 80 percent of the annual target for employment, according to Ning. In July, the unemployment rate was only 5.1 percent, the NBS said.
The government will adopt prudent monetary policies and proactive fiscal policies, with room to fine tune policy tools to make them more forward-looking and efficient, he said.
“With a basket of policy tools to use and ample room to maneuver, China is capable of achieving the annual growth target,” he said. China set the 2018 GDP growth target at around 6.5 percent.
The government will put greater effort into shoring up domestic demand and mitigate financial risks while improving the financial sector’s capacity to support the nonfinancial sector, he said.
A deleveraging campaign to rein in financial risks also has contributed to some cooling signs.
Faced with possible near-term depreciation pressure, China may use a mix of policy measures to stem major fluctuations in the currency market “when necessary”, said a former senior official with the State Administration of Foreign Exchange who declined to be identified.