China’s economy still under pressure in August, but signs point to strong resilience

By Wang Yi Source:Global Times Published: 2019/9/16 21:38:40

Positive signs point to resilience in face of risks: officials

Consumers shop for fruit at a supermarket in Shijiazhuang, North China's Hebei Province on Friday. Photo: VCG


China's economy continued to face mounting downward pressure in August, with growth in industrial output, retail sales and investment decelerating further, but positive signs also emerged that show strong resilience in the face of both internal and external risks, official data showed on Monday.

Despite the persistent downward pressure, officials and analysts are still confident that growth in the world's second-largest economy will be able to remain in the annual target of 6-6.5 percent, given the ample scope for fiscal and monetary policy and the potential of the domestic market. 

Industrial output registered growth of 4.4 percent in August, the slowest pace in 17 years and 0.4 percentage point slower than in July, according to data published by the National Bureau of Statistics (NBS) on Monday.

Growth in retail sales and investment also slowed in August, NBS data showed. Retail sales grew 7.5 percent year-on-year to 3.389 trillion yuan ($479 billion), 0.1 percentage point lower than July. Fixed-asset investment grew by a mere 0.4 percent year-on-year in August.

Though the data highlighted persistent downward pressure on the economy, other figures also showed stability in the first eight months of the year, according to Fu Linghui, a spokesperson for the NBS.

At a press briefing on Monday, Fu said that China's industrial structure is being optimized and growth in the high-technology service industry is significantly higher than overall growth.

Information transmission, software and information technology services grew by 16.9 percent, and leasing and business services grew by 8.1 percent, both higher than the 6.4 percent growth of the Index of Services Production in August, NBS data showed.

"Clearly, signs of quality growth are accumulating and the economic structure is optimizing, both positive signs during a tough transition period," Yuan Fuhua, director of the economic growth office of the Chinese Academy of Social Sciences, told the Global Times on Monday.

Yuan further noted that the difficulty for the Chinese economy should not be exaggerated and that major indicators will be kept within expectations and reasonable ranges.

In an interview with the Russian TASS news agency, Premier Li Keqiang struck a confident note on the economy, despite a complex international context and a higher base.

"The Chinese government has full confidence and ability to overcome all types of risks and challenges and keep economic growth stable and sound," Li said, according to a transcript published on the Chinese government's website on Monday.

Li stressed the need to secure and improve living standards, noting China will continue to increase investment in this area, as well as secure employment and increase input into social security, education and healthcare.

Employment remained stable in the first eight months of the year, with 9.84 million urban jobs added, accounting for 89.5 percent of the annual goal, according to the NBS.

Liu Xuezhi, an economist at Bank of Communications, said that China still has room to launch more active fiscal and monetary policies, including interest rate cuts, to stabilize the economy when necessary.

The People's Bank of China, the country's central bank, announced on September 6 a cut in the reserve requirement ratio for financial institutions of 50 basis points effective on Monday, which will release long-term funds of about 900 billion yuan.

Newspaper headline: Economy still under pressure in August


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