China on road to economic recovery

Published:July 19,2022

By Zhao Shiyue

A worker is seen in a water pump factory in Huzhou, Zhejiang province on July 12, 2022. [Photo/VCG]

China’s economy is expected to maintain a stable recovery in the second half of the year with a series of adjustment policies taking effect, experts and professionals were quoted as saying in a yicai.com report.

In the second quarter, China saw GDP grow 0.4 percent year-on-year. “Achieving positive growth in Q2 was not easy”, said Fu Linghui, spokesman for the National Bureau of Statistics.

Due to increasingly complicated international environment and sporadic virus outbreak domestically, the supply chain and logistics were disrupted, which increased pressure on social consumption and investment activities.

However, as virus shocks gradually eased starting in May, national economic indicators began to rebound significantly in June.

Guan Tao, chief economist of BOC International, said China’s macroeconomic adjustment policies are very effective, and the country should continuously ensure the smooth implementation of policies in H2 to offset uncertainties brought by the external environment.

In April, value-added industrial output fell 2.9 percent from a year earlier, but the figure turned positive in May and posted a 3.9-percent increase in June as enterprises accelerated work resumption and supply chain woes gradually eased.

Value-added output in automobile manufacturing surged 16.2 percent year-on-year in June, ending a three-month decline from March to May.

The strong rebound was mainly boosted by policy stimulus, including vehicle purchase tax cuts, said Zhong Zhengsheng, chief economist at Ping AnSecurities.

On the consumption side, retail sales of consumer goods in the first half reached 21.04 trillion yuan($3.12 trillion), down 0.7 percent year-on-year. In June, the figure turned positive with growth of 3.1 percent.

Sheng Songcheng, dean of the China Chief Economist Forum Institute, said recovery in consumption is a major challenge to maintaining steady economic growth this year.

The most effective way to boost consumption is to resume work and production in an all-around way and ensure the smooth operation of market entities, Sheng said.

Investment is playing a more prominent role in supporting economic development this year, with fixed asset investment rising 6.1 percent yearly to 27.14 trillion yuan.

Infrastructure construction investment increased 7.1 percent in H1 and rose 12 percent year-on-year in June as the country added 800 billion yuan of credit and raised up to 300 billion through financial bond issuance for the capital replenishment of major infrastructure projects, Zhong said.

The government work report for 2022 set the GDP growth target of around 5.5 percent for the whole year.

China is expected to keep up stable recovery in the second half with its vast domestic market and strong development resilience, Fu said, but it still has to make unremitting efforts to achieve this goal amid uncertainties both at home and abroad.

Lian Ping, chief economist and head of the ZhixinInvestment Research Institute, said China’s economy throughout the year is likely to have a strong rebound and the third quarter could be the period with the highest growth rate.

The most important thing is to enhance the implementation of adjustment policies and make sure the policies work as soon as possible, said Wang Yiming, former vice-president of the Development Research Center of the State Council.

chinadaily.com.cn