Optimizing structure hints at growth

China's economy, despite slight slowdown in some sectors, remained steady generally last month, with the continued optimization of its economic structure.

China’s economy, despite slight slowdown in some sectors, remained steady generally last month, with the continued optimization of its economic structure.

Industrial output expanded 6 percent year on year in July, the same pace as that in June, data from the National Bureau of Statistics showed yesterday.

Dragged down by cooling infrastructure investment, growth in fixed-asset investment slowed to 5.5 percent in the first seven months of the year, down from 6 percent in the first six months and continuing a downward trend since the start of the year.

Infrastructure investment growth softened to 5.7 percent in the January-July period, compared with a rise of 7.3 percent for the first half.

Liu Aihua, spokeswoman for the bureau, attributed the slowdown in infrastructure investment to a higher comparative base from last year, the government’s efforts to regulate public-private partnership projects and higher environmental standards.

The consumer goods market continued to maintain a market size of more than 3 trillion yuan (US$436 billion) in a single month in July. Retail sales grew 8.8 percent, 0.2 percentage points lower than that in June but 0.3 percentage points higher than May’s.

Although some indicators showed slight pullback in growth, Liu said the economic structure has been optimizing, with better quality and efficiency, which would lay a sound foundation for growth in the coming period.

A breakdown of the data showed the output of high-tech manufacturing, equipment manufacturing and strategic emerging industries all posted strong growth in the first seven months, growing 11.6 percent, 9 percent and 8.6 percent from a year earlier, respectively.

“The growth rates of these three sectors are all faster than that of overall industrial output in the same period (6.6 percent), indicating that the supply structure is being continuously optimized,” Liu said.

In one of the bright spots, private investment, which accounts for about 60 percent of overall investment, rose at a faster pace. Fixed-asset investment by the private sector climbed 8.8 percent year on year in the first seven months, up from 8.4 percent in the first six months.

Also of note, export growth of industrial products rebounded in July and contributed more to the industrial output growth, said Jiang Yuan, senior statistician at the statistics bureau. The export value of industrial enterprises expanded 8.7 percent year on year last month, 5.9 percentage points faster than that in June.

Employment remained stable, with 8.8 million new jobs created in the first seven months, fulfilling 80 percent of the government’s annual target.

Liu said readings of the July data showed the economy has been running within a reasonable range, a hard-won result amid complicated domestic and external environment as well as adverse weather conditions.

“Under circumstances where the external environment has undergone significant changes and the domestic structural adjustment has been solidly promoted, it was not easy to maintain economic growth in a reasonable range in July,” she added.

As the government vows to improve infrastructure and accelerate approval of projects, Liu said she expected the growth of infrastructure investment and fixed-asset investment to pick up and stabilize in the second half.

Analysts said the continued softness in investment and consumption growth called for more decisive and coordinated policy moves. “Although we have seen some early signs of financial condition easing and fiscal loosening in July,” the softness of some indicators highlighted the urgency to more timely and coordinated policy adjustments to anchor growth expectations and backstop the “vicious cycle” of financial condition tightening, CICC analyst Liu Wenqi said.

Looking ahead, the statistics bureau’s Liu said the government would enhance implementation of policies and strive to keep employment, the financial sector, foreign trade, investment and expectations stable.

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