Written by Staff Writer
17 Jul, 2019 | 3:43 pm
Reuters: Though facing challenges from both home and abroad, China’s steady growth in the first half of 2019 laid a solid foundation for continued economic growth, said experts on Monday.
China’s GDP growth slowed to 6.2% year on year in the second quarter, which brings the economic growth rate to 6.3% for the first half of 2019, according to data released by the Chinese National Bureau of Statistics (NBS) on Monday.
Other data released also show the economy is still growing at a steady pace.
The country’s total value includes industrial enterprises, which posted steady growth and an increase of 6% year-on-year. The fixed-asset investment saw a 5.8% growth in the first half of the year, faster than the growth in the first five months. Also, employment has remained stable, with the unemployment rate in urban areas at 5.1%.
Isaac Cohen, president and CEO of Inverway, said the 6.2% growth was a signal showing the world economy is slowing down.
“It shows that the world’s economy is undergoing a global slowdown. No economy is being spared. In the sense that, everybody is slowing down. Of course, there are certain specific factors indicate that China and the United States, I would say, which are contributing, being the two major economies, are contributing to deepening the slowdown,” said Cohen.
Affected by the trade dispute between China and the United States, the two major economies are suffering in both imports and exports. However, China’s strategy of shifting from its dependence on imports and exports to stimulating its domestic consumption did work, keeping its economic growth moving steadily forward.
“The trade war has an influence definitely because if you look at the figures on the Chinese imports have gone down about 7%. And that indicates the economy is growing less because, in order for an economy to expand, it needs to import more. This is what we see. But China is in the process of adjusting its economy to a different set-up. In the sense that it’s moving away from an export economy to an economy based on its domestic market,” said Cohen.
Cohen said if the U.S. and China reach a deal, it will turn things around and both sides will benefit from it.
“Well, it would definitely help, because you see for instance in the United States, the trade war with China is affecting agriculture, for instance, severely and farmers in the United States are very concerned because they have lost one of their main markets, which is the Chinese market. But as we go along, I think it would help if the trade war is out of the possibility and we can start focusing on stimulating these economies much more,” said Cohen.
As the NBS spokesman Mao Shengyong said, the Chinese economy has sustained the momentum of progress in overall stability. However, the country should also be aware that the economic conditions are still severe both at home and abroad, and global economic growth is slowing down.
Internal and external challenges do remain for China’s economy, but Gao Ruidong, the chief macroeconomist of Guotai Jun’an Securities, said that even though downward pressure lingered in the second half, solid fundamentals can still bring optimism for the country’s development.
“I think there will be greater resilience shown in terms of the economic performance in the second half of 2019, which will be reflected in three aspects. First, large-scale tax cuts and fee reductions will provide stronger support to the economy, as the country has been promoting a 200 million yuan in tax cuts and fee reductions since the second quarter. Second, the counter-cyclical adjustment measures will strengthen macro prudent management,” said Gao.
Thirdly, the opening-up and reform is also a big boost to our confidence, Gao added.
Moreover, consumption, which has played a prominent role in driving growth, contributed over 60% of the GDP in the first half of the year.
The solid results from the first half of the year have laid a foundation for continued economic growth. Challenges ahead do remain, but experts say China is prepared to withstand the pressure.
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