NDRC optimistic about economic prospects for 2nd half of the year
Print Edition
CHINA’S top economic planner says it feels optimistic about the second half of 2015, but is paying close attention to volatility in the country’s stock markets.
Improved performance in the first half of the year bodes well for the economy but growth momentum is still “insufficient,” Li Pumin, secretary general of the National Development and Reform Commission, told a news conference in Beijing yesterday.
“Some firms still face operational difficulties while there is relatively big pressure on fiscal revenues and the job market,” Li said. “There is also an outstanding issue that the flow of capital does not translate into the real economy smoothly.”
China reported a growth rate of 7 percent for the first six months, in line with the government’s full-year target. But a stock market plunge since June has fueled concerns about the health of the economy and risks to the financial system.
Li said policy-makers were paying close attention to fluctuations in China’s stock markets and described the recent activity as “abnormal.”
But he added: “The fundamentals of China’s economy are stabilizing and turning better. So we have the foundation and necessary means to keep the healthy development of capital market including the stock market.”
Since early June, China’s main indexes tumbled by a third in less than a month, before rebounding by a quarter after the government stepped in with a number of unprecedented support measures to stave off a full-blown crash. However, stocks suffered their biggest one-day fall since 2007 on Monday and gyrated wildly again yesterday despite a fresh pledge by regulators to lend further support to the market.
Asked about the outlook for inflation, Li said he expected consumer prices to edge up mildly in the second half of 2015, thanks to stable pork prices.
However, Gao Gao, an NDRC vice-director, said he was not optimistic about external demand.
Gao reiterated that China will keep policy stable in the second half and accelerate construction of key development and infrastructure projects to lift the economy.
China’s central bank has cut interest rates three times this year, in a bid to support an economy headed for its poorest performance in a quarter of a century. Many economists expect further policy easing in coming months.
China’s industrial output grew 6.3 percent year on year in the first half, an NDRC-affiliated bureau said yesterday.
Output in high-tech manufacturing rose 10.5 percent year on year in the first half, and clean energy contributed 17.1 percent of China’s total energy consumption in the same period.
The steel and construction material industries led a decrease of electricity consumption among the heavy industries, posting a year-on-year decline of 6.5 percent and 6.4 percent respectively from January to June, the bureau said.
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