Global EditionASIA 中文雙語Fran?ais
    China
    Home / China / National affairs

    Measures expected to boost economy

    By OUYANG SHIJIA | CHINA DAILY | Updated: 2022-07-13 08:35
    Share
    Share - WeChat
    SHI YU/CHINA DAILY

    Stimulus policies will greatly benefit industry and consumers alike, analysts predict

    China's economy will likely rebound in the second half of this year with the help of a package of stimulus measures designed to prop up growth, according to economists and analysts.

    They said that the economy is gradually recovering from a slowdown caused by a series of COVID-19 outbreaks since March, and that the country has the tools and the ability to step up policy support to aid recovery. They also said that they expect to see improvements in some major economic indicators, like industrial output and consumption, in the coming months, as a result of better epidemic containment and stronger policy support.

    The State Council, China's Cabinet, recently unveiled 33 measures promoting fiscal, financial, investment, consumption and industrial policies to jolt the economy.

    They include larger scale value-added tax credit refunds, speeding up the issuance of special local government bonds and increasing financial support for infrastructure and major projects.

    Tommy Wu, lead economist at Oxford-based independent global advisory firm Oxford Economics, said that his team believes China's economy is beginning to recover following the lifting of COVID restrictions in Shanghai on June 1 and the rolling out of strong stimulus measures to shore up growth, and that they expect to see a stimulus-driven recovery in the second half of the year.

    Wu added that infrastructure investment is the best way to boost development.

    "Even if some cities or rural areas have been affected by COVID outbreaks, projects in other areas could continue," he said. "The government is aiming to spend the proceeds of special local government bonds by the end of August. State-owned policy banks will also expand credit to support infrastructure projects."

    To roll out further stimulus packages in the second half of the year, Wu said China's government will probably need to find other ways to raise additional funding, such as by issuing special sovereign bonds, as it did in 2020.

    He cited real estate as one industry that could benefit. Measures such as one encouraging the delayed repayment of housing loans, coupled with recent mortgage rate cuts could help stabilize the residential property market.

    "However we don't think it will become a significant growth driver this time around, as authorities will likely keep most of the important curbs in place to contain the real estate sector's leverage," he added.

    Meanwhile, VAT rebates will help companies stay afloat and support the economic recovery when business conditions start to improve more visibly.

    Wu said stimulus measures to boost consumption, such as a policy reducing sales tax on cars, will be useful to some extent, but effectiveness will be constrained by the extent of mobility restrictions and income prospects.

    "Consumer sentiment is unlikely to turn sanguine as the risks of sporadic COVID outbreaks and reimposed restrictions in small neighborhoods remain high. Weak employment and income prospects are also weighing on consumption," he said.

    Regarding financial measures, Wu said efforts toward monetary easing-in which a central bank lowers interest rates to make credit more accessible-will likely be made to support small and medium-sized enterprises, the manufacturing and real estate sectors, and infrastructure financing.

    "Still, we think there is room for the People's Bank of China, China's central bank, to lower market interest rates and loan prime rates, and have one more rate cut in the third quarter, as a broad-based monetary easement through rate reductions could be effective in boosting growth after the economy stabilizes and could stimulate credit demand," Wu said. "But we don't expect additional cuts afterward, as the policy divergence with the United States and renminbi weakness will act as a constraint."

    Chen Jia, a researcher at the International Monetary Institute at the Renmin University of China, spoke highly of the government's stimulus policy measures, saying the improvement in recent indicators has proved their effectiveness.

    An official survey taken recently showed an improvement in both manufacturing and services. The official Purchasing Managers' Index for the manufacturing sector rose to 50.2 from 49.6 in May, returning above the 50-point mark that separates expansion from contraction, and according to the National Bureau of Statistics, official services PMI came in at 54.3, compared with 47.1 in May.

    Another private-sector survey, which focused on small and export-oriented businesses, also showed an improvement in China's economic activity in June.

    Media group Caixin said that its composite PMI, which includes both manufacturing and services activity, rose sharply to 55.3 in June from 42.2 in May.

    Chen said he takes a rosy view of China's growth in the second half of the year and that he expects the country to experience accelerated economic recovery, with growth ending the year at over 4 percent.

    Despite the challenge posed by rising consumer inflation, due in large part to the recent pork price rally, experts said the country still has plenty of room to adjust its policies.

    Last month, China's factory-gate inflation rose at its slowest rate since March 2021 with the help of effective government measures to resume work and production, stabilize key industrial and supply chains and ensure stable supplies and prices, leaving room for further stimulus policy measures to shore up growth.

    China's producer price index, which gauges factory-gate prices, rose 6.1 percent year-on-year last month, following a 6.4 percent increase in May, the National Bureau of Statistics said on Saturday, and the consumer price index, the main gauge of inflation, rose 2.5 percent year-on-year last month, compared with a 2.1 percent rise in May.

    In fact, compared with soaring prices in some other major economies, China's overall price level is generally stable. Inflation hit a new 40-year high in May in the US, where CPI rose 8.6 percent year-on-year, official data showed.

    Wen Bin, chief economist at the China Minsheng Bank, said his team expects CPI inflation to rise slightly and PPI inflation to decline in the second half of the year, meaning inflation will not put significant pressure on China's monetary policy easing.

    Top
    BACK TO THE TOP
    English
    Copyright 1995 - . All rights reserved. The content (including but not limited to text, photo, multimedia information, etc) published in this site belongs to China Daily Information Co (CDIC). Without written authorization from CDIC, such content shall not be republished or used in any form. Note: Browsers with 1024*768 or higher resolution are suggested for this site.
    License for publishing multimedia online 0108263

    Registration Number: 130349
    FOLLOW US
     
    亚洲欧洲日产国码无码久久99| 免费无码国产V片在线观看| 国产成人无码精品一区二区三区| 日本aⅴ精品中文字幕| yy111111少妇影院里无码| 直接看的成人无码视频网站| 欧美 亚洲 有码中文字幕| 无码精品国产VA在线观看| 再看日本中文字幕在线观看 | 亚洲乱码中文字幕综合234| 国产精品va在线观看无码| 亚洲av永久无码精品网站| 中文字幕无码高清晰 | 自拍中文精品无码| 亚洲精品无码专区在线播放| 日韩精品无码AV成人观看| 无码人妻久久一区二区三区蜜桃| 痴汉中文字幕视频一区| 中文字幕色AV一区二区三区| 久久无码人妻精品一区二区三区| 久久久久亚洲Av无码专| 人禽无码视频在线观看| 色AV永久无码影院AV| 色窝窝无码一区二区三区| 亚洲AV中文无码乱人伦下载 | 伊人久久综合无码成人网| 在线天堂中文新版www| 日韩欧美中文字幕一字不卡| 亚洲一区二区三区无码中文字幕| 忘忧草在线社区WWW中国中文| 亚洲天堂2017无码中文| 久本草在线中文字幕亚洲欧美| 亚洲av无码天堂一区二区三区| 中文字幕无码不卡在线| 中文一国产一无码一日韩| 被夫の上司に犯中文字幕| 无码中文字幕日韩专区视频| 暖暖免费日本在线中文| 亚洲国产综合精品中文字幕| 无码AV动漫精品一区二区免费 | 精品亚洲欧美中文字幕在线看 |