More policy support to vitalize economy expected

Customers smell perfumes in a duty-free shop in Haikou, capital of South China's Hainan province, Jan 3, 2022. [Photo/Xinhua]

Despite improvements in June, stronger stimulus likely in such areas as consumption, experts say

China will likely strengthen macroeconomic policy support while improving anti-COVID-19 measures to further vitalize economic activity, according to government officials and economists.

Although the nation's economy improved in June, more policy measures are expected in areas that need stronger stimulus, such as consumption, experts said.

Data from the National Bureau of Statistics showed on Friday that the Chinese economy grew 2.5 percent year-on-year in the first half of 2022, requiring more of a push to achieve the annual growth target of around 5.5 percent.

During the two-day meeting of the finance ministers and central bank governors of the Group of 20, which ended on Saturday in Indonesia, Yi Gang, governor of the People's Bank of China, the country's central bank, said the bank will intensify the implementation of prudent monetary policy to provide stronger support to the real economy.

China's economy is facing downward pressure, while inflation remains relatively low and expectations are stable.

Zhang Yansheng, chief researcher at the China Center for International Economic Exchanges, said at a forum held by China News Service on Friday that China should better coordinate epidemic prevention and control with economic recovery.

"The most important thing is promoting work and business resumption," he said, adding that the nation should also implement major infrastructure projects in time and stimulate consumer spending more directly and precisely through measures such as distributing consumption coupons.

Bai Jingming, former vice-president and a researcher at the Chinese Academy of Fiscal Sciences, said the Chinese economy has already stabilized from unexpected negative factors, and there is still potential to tap in domestic demand.

Data from the NBS showed that value-added industrial output, a gauge of activity in the manufacturing, mining and utilities sectors, grew 3.9 percent in June from a year earlier after a 0.7 percent rise in May.

Fixed-asset investment, which measures expenditures on items including infrastructure, property, machinery and equipment, rose 5.6 percent year-on-year in June, up from 4.6 percent in May.

Retail sales, a key measure of consumer spending, grew 3.1 percent year-on-year in June, compared with a 6.7 percent decline in May.

However, in the first half of the year, retail sales fell 0.7 percent from a year ago, while in the second quarter, they declined 4.6 percent.

Liu Shangxi, president of the Chinese Academy of Fiscal Sciences, said at a forum held on Saturday by the China Wealth Management 50 Forum that China should further deepen reforms to unleash more development dividends.

To help stabilize employment, consumption and growth, China should move faster to grant permanent urban residency to people who move to cities from rural areas, he said.

Wang Yiming, vice-chairman of the China Center for International Economic Exchanges, said that expanding effective investment will be key to spurring economic recovery.

Reforms and policy measures to boost consumption, accelerate industrial digitalization and smart transformation, and reinforce market confidence are also needed, he said.

Some analysts and economists said it will be difficult, but possible, to reach the annual growth target.

Wei Jianguo, vice-chairman of the CCIEE and former vice-minister of commerce, forecast that China's foreign trade will expand at two-digit annual rates in the third and fourth quarters.

With further recovery in investment and consumption, as well as policies in place to unleash more effects, the Chinese economy is capable of realizing its annual growth goal, and may even increase at a rate between 5.5 to 6 percent, he told Chinese news outlet Cls.cn.

Dai Xianglong, former governor of the nation's central bank, estimated that China's economy would expand by over 5 percent year-on-year in the third and fourth quarters of the year, posting full-year GDP growth for 2022 of more than 4.5 percent.

Foreign investors also have expressed unwavering confidence in China's market.

Hiroshi Hamaguchi, chairman and president of Astellas China, said Astellas remains confident in business prospects in China for 2022, as it has witnessed the strong resilience of the Chinese economy amid COVID-19.

Shen Bo, global vice-president of Netherlands-based semiconductor equipment supplier ASML Holding NV, said ASML remains committed to China's market and plans to hire more than 200 additional employees this year.

Over the past few years, its employee numbers in China have increased due to expanding business in China, he said.