The Report of the State Council on the Implementation of Plans on Economic and Social Development of the Year was deliberated at the 29th meeting of the Standing Committee of the 12th Session of the National People’s Congress on Aug. 29.
The report indicated that domestic demand contributed 96.1 percent to the economic growth in the first half. The consumption upgrading sped up while the investment structure was further optimized. Meanwhile, China’s economic growth, employment and other major indicators are better than expected in the first half. As for the trend of macro policies in the second half, the report indicated that it will remain the sustainability and consistency of macroeconomic policies. Fiscal policies will be more active and effective and monetary policies will remain moderate and neutral.
Safeguard sound operation of finance and property
China’s economic operation remained stable in the first half. The economic growth of 6.9 percent beats the expectation at the beginning of the year, making it a leader among major economies in terms of the economic growth. He Lifeng, head of China's National Development and Reform Commission (NDRC), indicated in the report that China’s economic growth, employment, price, international balance and other major indicators are better than expected in the first half.
The drivers to the economic growth saw positive changes under the stable economic operation. The report mentioned that the domestic demand played a more supporting role in economic growth. Domestic demand contributed 96.1 percent to the economic growth in the first half.
It is learnt that consumption upgrading, investment structure improvement and other positive factors are accumulating in the demand end. The report shows that the total retails of social consumer goods increased 10.4 percent year on year in the first seven months. The online retails of physical products surged 28.9 percent. Services consumption continues booming. The domestic tourism revenue and box office jumped 13.5 percent and 11.2 percent in the first half.
For investment, the report indicated that the fixed assets investment increased 8.3 percent in the first seven months. The investment in infrastructure for strengthening the weaknesses in economic and social development hiked 20.9 percent and those in services for economic transformation and upgrading and high-tech manufacturing increased 11.3 percent and 20.7 percent, higher than that of the whole investment.
Regarding to financial field, the report mentioned that China's broad measure of money supply M2 grew by 9.2 percent, liquidity of banking system stayed neutrally and moderately, and loans lending to the real economy and social financing scale kept rapid growth in July. Supervision in financial market was strengthened. Non-performing loans of financial institutions continued to drop. Financing mechanism of stock market saw gradual improvement. Insurance industry enjoyed sufficient solvency. Exchange rate of RMB was stable on the whole, but it appreciated a little against the US dollar.
Regulation policies in real estate market began to take effect since this year. The report stated that transaction in real estate market dropped in some hot cities. The year-on-year increase in prices of newly-built commercial residential buildings continued to decline in July but its month-on-month growth maintained stable basically. Prices in other cities also remained steady.
People’s livelihood is improved continuously while the economy enjoyed stable performance. According to the report, growth in resident incomes and economic growth were almost the same. Per capita disposable income of China hiked by 7.3 percent in the first half of this year.
To enlarge demand properly and strengthen guidance on expectation
The economic achievement made in the first half of this year is a result of various indicators beating expectation, and experience and measures of economic development behind the achievement deserve more attention.
While the achievement was accomplished in the first half of this year, the report didn’t neglect many problems and challenges which still exist in current economic operation. It mentioned that though global economy has been improved to some extent, there are still a lot of unstable and uncertain factors at this moment. The uncertain economic and financial policies in some big countries, potential trade protectionism, and unsteady geopolitical situation will exert adverse influence on China.
As for domestic situation, supply-side reform is still being deepened. There is still poor circulation in the real economy. Foundation for stable economic operation is not solid. Structural contradiction is outstanding. Enterprises face increasing pressure on higher costs. Economic trend in different regions continue to differ.
In terms of economic work in the second half of this year, the report said that the government should keep consistency and stability of policy, implement proactive fiscal policy and prudent monetary policy, focus on supply-side structural reform, expand total demand properly, strengthen guidance on expectation, and ensure that supply-side structural reform is deepened to boost economic structural adjustment to achieve substantial progress and no systematic financial risk occurs.
Regarding to implementing proactive fiscal policy, it should be increase expenditure in people’s livelihood and lower tax and fee burdens of enterprises. In the second half of this year, the government should carry out fiscal policies which are more proactive and effective, implement various measures of cutting tax and fees which have been introduced, and investigate and punish illegal behaviors.
Monetary policy should be kept moderate and neutral. The government should adopt multi monetary policy tools to maintain market liquidity basically stable and further facilitate channels of transmitting policy rate of the central bank to the real economy.
Translated by Star Zhang
Latest comments