China EconTalk: China will have a 6.5% annual growth rate

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03:23

China’s economic performance in the first half of the year shows moderation and resilience, and an annual GDP growth rate of 6.5 percent can be achieved, said Jeff Ng, chief economist for Asia at Continuum Economics.

Figures from the National Bureau of Standards showed that the Producer Price Index (PPI) in the first half of 2018 increased 3.9 percent compared to the same period last year.

Although manufacturing growth was moderated, the growth of China's service sector was still strong, Ng said. And he believed that these two sectors could support China’s GDP growth rate in the second half of the year to achieve at least a 6.5 percent annual growth target.

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Meanwhile, official data indicated that fixed-asset investment grew six percent year-on-year in the first half, 0.1 percentage points lower than the same period in 2017.

Ng added that fixed-asset investment slowed down “in the pace which the government wants it to be,” as the country is transiting to a consumption-driven economy from the investment-driven model.

Ng said the ongoing trade spat with the US was expected to put more pressure on China, such as in the manufacturing and external-oriented service sectors.

In the meantime, he warned that other economies in Asia, like Singapore and the Republic of Korea (ROK), should maintain vigilance against the downside risks in exports and capital markets if China-US trade tensions proceed.