China’s economy shows signs of stabilising: Official
BEIJING, Aug 29 – China’s economy is stabilising slowly as policy stimulus gains traction while the government’s sustained property curbs have suppressed speculation, the head of the country’s top planning agency said today.
Zhang Ping, head of the National Development and Reform Commission, told a meeting of the National People’s Congress, or parliament, that China’s two-pronged policy programme had been effective.
“The government’s policies and measures have been effective and the country’s economic growth is stabilizing at a slow pace,” Zhang was quoted by the official Xinhua news agency as saying.
“Speculative and investment demand have been effectively suppressed due to government control policies for the real estate market,” he added.
Zhang said both economic growth and consumer inflation were within the government’s targeted range, while main reforms to adjust the economic structure were making progress.
But he highlighted downward risks facing the economy because of global headwinds and domestic economic distortions.
China must step up efforts to boost domestic demand and press on with reforms to transform its growth model, he added.
Zhang made the remarks when delivering a report to lawmakers on the progress of national economic and development plans in the first half of 2012.
Finance Minister Xie Xuren also told parliament that the government would continue to revamp its tax system by carrying out various reforms, including expanding property ownership tax and deepening reforms of resource tax and consumption tax.
He also pledged to quicken the disbursement of export tax rebate and further expand the use of export credit insurance to support the battered export sector, repeating Premier Wen Jiabao’s position set out over the weekend.
“In the next stage, we will continue to implement proactive fiscal policy to promote stable economic growth and will push ahead with fiscal and tax system reform,” Xie told the top legislature.
Investors are nervously eyeing China’s domestic policy mix as external demand for the country’s factory goods sinks with its biggest customer – the European Union – mired in a mess of sovereign debt and recession risks.
To boost China’s economy, the government has fast-tracked investment spending on key projects, cut the amount of cash banks must hold as reserves by 150 basis points in three steps and lowered interest rates twice in the space of one month.
But weak economic data in July has fanned worries that the economic slowdown may run into a seventh straight quarter in the three months of July-September, further raising expectation of more government action to shore up growth.
China’s economy grew 7.6 per cent year-on-year in the second quarter, its slowest pace in more than three years. The country is forecast to deliver its slowest full year of growth since 1999, at just 8 per cent, according to the latest Reuters poll. – Reuters