Chinese economy slow in expansion, but steady with reforms

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Rather than increasing economic optimism, the latest official data released on Thursday showed the bulk of China’s economy in the first two quarters is slow in expansion but steadily growing with reforms.

Chinese economy slower in expansion

According to the National Bureau of Statistics (NBS), China’s private sector fixed-asset investment (FAI) grew 6.4 percent year-on-year to 23.92 trillion yuan (about 3.65 trillion US dollar) in the first eight months, and foreign direct investment (FDI) into the Chinese mainland rose 9.1 percent year-on-year to 62.52 billion yuan (9.6 billion US dollars) in August.

This amount accounted for 60.7 percent of the total FAI, but the growth has slowed from 6.9 percent in the January-July period. Private investment to the primary sector rose 14.6 percent in the eight-month period, followed by an increase of 8.4 percent for the service sector and 4 percent for the secondary sector. In the first eight months, FDI dropped 0.2 percent year-on-year to 547.94 billion yuan.

Xinhua Photo

Despite China posting weaker than expected growth in key economic indicators in the first eight months of this year, industrial output – a gauge of the activity of large enterprises – grew 6 percent year-on-year in August, down from the 6.4 percent pace a month earlier, retreating to the lowest level this year.

China's steady growth

Retail sales rose 10.1 percent last month, lower than market estimates of 10.5 percent and July's 10.4-percent rate. Private investment and property sales also experienced slower growth.

The data came after a strong economic rebound that featured forecast-beating GDP expansion in the first two quarters and aroused concerns over the growth impetus of the country’s economy.

CGTN Photo

"China still faces lurking problems and challenges" from external uncertainties and domestic transformation, NBS spokesperson Liu Aihua said, but dismissed worries that the lackluster performance will continue for the remainder of the year.

"Short-term volatility can be triggered by non-economic factors, such as weather and comparison bases, and does not represents the overall trend," Liu said, adding that high temperatures and more rainfall disrupted factory activity this summer.

China's unemployment rate and inflation was under control

China’s employment was stable and inflation was under control, according to a recently released report. China's unemployment rate in 31 cities was under 5 percent last month and consumer prices rose 1.8 percent. Industrial enterprises also saw their profits improve substantially in the first seven months.

CGTN Photo

"The economy still stayed within a reasonable range," Liu said, predicting stability in the second half. China has targeted an annual economic growth of around 6.5 percent for 2017, down from the 6.7 percent pace recorded in 2016.

Chinese model of economic development

Under today’s global economy environment, China is pressing forward with a notably Chinese model of economic development that draws strength from consumption, innovation and the service sector.

According to the official data, China’s services maintained rapid expansion in August, with revenues for information and rental services logging double-digit growth. Investment in high-tech sectors jumped 19.5 percent in the first eight months, while the environmental protection industry saw investment up by 28.2 percent.

Reuters Photo

The output of industrial robots surged 63 percent from January to August, and 25 percent more new-energy vehicles rolled off assembly lines.

China has made headway in downsizing saturated sectors, eliminating around 128 million tonnes of excess coal capacity during the January-July period, while low quality steel products were banned.

China's central bank injected 100 billion yuan (about 15.3 billion US dollars) into the money market Thursday. China can keep appropriate liquidity levels while avoiding excessive liquidity injections, in order to continue China’s efforts to improve the quality and efficiency of the economy.

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