Chinese economy likely to report steady growth in April, resilient to US pressure: experts

Source:Global Times Published: 2019/5/14 21:18:26

China is set to release its April economic statistics on Wednesday, and experts predicted the domestic economy will pick up momentum and maintain steady growth, lifted by strong consumption power at home and stimulated by government moves to cut fees and taxes.

They cautioned that an unstable external situation, specifically an escalating China-US trade war, might exert pressure on exports in the following months. But the Chinese economy, which features high-quality growth, is resilient enough to overcome the difficulty of crippled trade.

China reported GDP growth of 6.4 percent in the first quarter of 2019, beating market expectations. Experts said the country's economy is stabilizing, despite ongoing trade tensions with the US.

Dong Dengxin, director of the Finance and Securities Institute at the Wuhan University of Science and Technology, told the Global Times on Tuesday that with the country's moves to cut fees and support small and medium-sized companies, and the gradual recovery of market confidence, economic figures for April are expected to remain at a stable level.

The Chinese government vowed to cut taxes and fees by 2 trillion yuan ($290.6 billion) in 2019 to boost consumption and shore up the manufacturing sector. In 2016, the cuts totaled just 500 billion yuan.

"China's large population base and a growing middle class are strong drivers of the domestic economy," Dong said.

China's consumer price index (CPI), a main gauge of inflation, in April rose 2.5 percent from a year earlier, meeting analysts' expectations and slightly higher than the 2.3 percent year-on-year rise in March.

The steady trend in the CPI will back the growth of China's economy, and the growth momentum is expected to continue for some time, Cong Yi, a professor at the Tianjin University of Finance and Economics, told the Global Times on Tuesday.

China still has enough adjustment space for the domestic economy, Cong said. "The slowing pace is a process every country has to go through when reaching this phase."

China has set a GDP growth target of 6 to 6.5 percent this year as the country aims to seek higher-quality growth amid mounting uncertainties in the global economic landscape, according to the annual Government Work Report delivered by Premier Li Keqiang at the Two Sessions in March.

The April economic figures also come amid an escalating trade war between the world's two largest economies. China on Monday struck back at US tariffs on Chinese goods, announcing duties of 5 percent to 25 percent on more than 5,100 products from the US worth tens of billions of dollars, starting June 1, the Customs Tariff Commission under the State Council, China's cabinet, said in a statement.

The trade spat with the US is likely to become the new normal, and the dispute won't be settled overnight, thus exerting pressure on the country's future exports, experts said. 

China's export shrank in April, falling 2.7 percent compared with the same period in 2018, customs data showed.

"The decline in exports, mainly arising from the unstable China-US trade relationship, could be partly offset by increases in Belt and Road Initiative markets and strong domestic consumption power," Dong said.

Global Times

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