Chinese economy set to defy short-term headwinds

File photo shows view of the city of Shanghai, east China. (Xinhua/Fang Zhe)

BEIJING, Aug. 19 (Xinhua) -- Growth in major economic indicators in China softened last month amid extreme weather conditions and an unexpected COVID-19 resurgence, but the short-term headwinds will not change the long-term growth prospects of the economy, analysts said.

Latest data from the National Bureau of Statistics (NBS) pointed to an upturn in industrial production, retail sales and fixed-asset investment in July, but the growth pace was slower than in June.

The dip was mainly a combined result of sporadic outbreaks of COVID-19, high temperatures and torrential rains this summer, said the Bank of Communications in a research note.

As the rain season ends, the impact of extreme weather on economic activities will diminish, the bank said, cautioning that uncertainties lie in the containment of the pandemic as the global spread of the Delta variant could hurt both external and domestic demand.

China has acted swiftly to contain the latest COVID-19 resurgence, which first emerged in the airport of Nanjing in eastern China, and quickly spread to multiple other cities.

With massive nucleic acid testing, accelerated vaccination, closed-loop management and travel restrictions in place, the country has seen an apparent downward trend in new locally transmitted COVID-19 cases, with only 5 new locally confirmed infections reported Wednesday.

Strict epidemic control has proved to lay a solid foundation for economic recovery. In the first half of this year, the country's gross domestic product jumped 12.7 percent from a year earlier as factories resumed production and people restarted their traveling in China.

The stable growth this year can be attributed to the country's holistic approach in managing domestic and international situations and coordinated measures in epidemic control and economic development, said Wang Likun, a researcher with the Development Research Center of the State Council.

The country's ongoing structural reforms have made the economy less prone to external shocks. In line with the goal of high-quality development, China's investment in high-tech manufacturing surged in the first seven months, supporting short-term growth while making the economy more self-sufficient in the long run.

As the country pushes the new development paradigm and deepens the supply-side structural reform and fosters innovation, the quality of growth will be further enhanced, said NBS spokesperson Fu Linghui, predicting a stable recovery of the Chinese economy in the second half of this year.

With a stable outlook, policymakers are steadily pushing the agenda of promoting common prosperity to make economic development more balanced and inclusive.

A key meeting Tuesday attended by the country's top leaders stressed a people-centered development philosophy and promoting common prosperity in the pursuit of high-quality development.

"Common prosperity is an essential requirement of socialism and a key feature of Chinese-style modernization," the meeting said.