BEIJING  -   Multiple indicators have pointed to improved performance of the Chinese economy in the first half (H1), signaling sustained recov­ery momentum as the country navigates hurdles and head­winds with a targeted policy mix.

Speaking at a symposium on the economic situation this week, Premier Li Qiang said that the Chinese economy has sustained sound upward mo­mentum and nurtured new growth drivers despite the complex external environment since the start of this year. He stressed that such achieve­ments were “hard-won”. Al­though there are still many dif­ficulties and challenges, policy measures from the government have continued to take effect, and positive market factors are building up, the premier said.

UPBEAT SIGNALS

China’s foreign trade reached a new high in the first six months, with its goods trade volume expanding 6.1 percent year on year to 21.17 trillion yuan (about 2.97 trillion US dollars), customs data showed Friday. In particular, export growth continued to rebound, rising 6.9 percent year on year during the period, a figure that foreign news outlets reported as having “beaten forecasts”.

Consumer spending has perked up amid the boom of services consumption, as Chi­nese consumers are more will­ing to spend on dining, live concerts and trips. According to data from the China Asso­ciation of Performing Arts, the country’s box office revenue of commercial performance saw a surge of about 13 percent from a year ago in H1, reflecting the growing popularity of culture and art activities among con­sumers. The number is largely in line with official consump­tion data unveiled earlier. In the January-May period, China’s retail sales of consumer goods, a major indicator of the coun­try’s consumption strength, climbed 4.1 percent year on year, according to the National Bureau of Statistics (NBS).

Investment is another closely watched economic indicator. In the April-June period, the project investment activity in­dex, compiled based on project bidding data by the State In­formation Centre, surged 32.1 percent quarter on quarter, suggesting the robustness in investment activities despite drag from the real estate sector.

Growth of the index indicates that implementation of related projects will be accelerated in the following months, as win­ning the bid is the first step of de­livering projects, said Yang Daol­ing, division head of the big data development department of the State Information Centre. Tech-related industries have become favoured sectors among inves­tors. Data from the NBS revealed that investment into high-tech industries posted stellar growth by notching a year-on-year in­crease of 11.5 percent in the January-May period, well above the 4 percent headline growth of fixed-asset investment.

POLICY TOOLBOX

China has set an annual growth target of around 5 per­cent for the whole year. In the first quarter, the Chinese econ­omy expanded by 5.3 percent.

While acknowledging prog­ress, Premier Li also stressed the need to maintain clear-minded. He said that factors affecting growth have become more complex than before and, therefore, addressing these dif­ficult problems in economic op­eration requires great efforts.

Chinese economy currently faces an increasingly complex and severe external environ­ment, insufficient effective do­mestic demand and the yet-to-be-strengthened endogenous driving force, NBS spokesper­son Liu Aihua cautioned in a press conference in June.

Given that external uncer­tainties still loom large, fully tapping China’s own super-sized market and boosting do­mestic demand remain key to propping up growth. To spur market demand, China imple­mented several measures in June, including expanding its visa-free transit policy, re­laxing vehicle purchase re­strictions, and promoting the consumption of intelligent, AI-powered electronics.

The country also initiated a new round of consumer goods trade-ins in March. With more subsidies and incentives, the initiative has led to rising sales of products such as cars, home appliances and furniture.

On the fiscal front, China has adopted a slew of proactive fis­cal policies, including the issu­ance of ultra-long special trea­sury bonds, to boost investment and consumption. Meanwhile, interest rates, re-financing and other monetary tools have also been leveraged to strengthen counter-cyclical adjustments and bolster the real economy. Apart from harnessing con­sumption and investment to stimulate growth, China has also introduced multi-pronged policies to cushion the impacts of the property sector.

Measures announced so far include preferential policies for home buyers, a re-lending fa­cility for local state-owned en­terprises to take loans and buy commercial homes for afford­able housing, as well as a white list mechanism to help cash-strapped developers access credit. Zhang Bin, deputy di­rector of the Institute of World Economics and Politics at the Chinese Academy of Social Sci­ences, said insufficient demand is still the major problem stall­ing China’s economic operation. He called for efforts to further strengthen counter-cyclical ad­justments by leveraging fiscal and monetary policies.

During the economic sym­posium, Premier Li stressed that policy measures should be centered on achieving this year’s economic growth tar­gets. China should further ensure solid macroeconomic policy delivery, work to lever­age policy synergies, enhance the effectiveness of policy im­plementation and facilitate the sustained and healthy develop­ment of the economy, Li said.