Growth stabilizes, reform sees progress
- By Yan Pei
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E-mail China.org.cn, July 23, 2014
China's economic growth beat expectations and expanded 7.5 percent in the second quarter, showing strong recovery signs following weak first quarter data.
According to the National Bureau of Statistics (NBS), China's GDP grew 7.5 percent year on year in the second quarter of 2014. Recovering economic momentum helped growth in the first half reach 7.4 percent.
"The Chinese economy showed good momentum of stable and moderate growth in the first half," said NBS spokesman Sheng Laiyun at a press conference.
Chinese Premier Li Keqiang's later comment echoed Sheng's remarks.
At a seminar with economists a day after the first half data release the Premier said China can realize GDP growth of 7.5 percent or higher this year.
Analysts also believe the Chinese economy is heading towards stabilization and China's structural reform of its growth model has witnessed positive progress.
Minor stimulus measures lead to stabilized growth
China's GDP grew by 0.1 percentage point in the second quarter. On a quarter-on-quarter basis, the economy expanded by 2 percent in the April-June period, which was 0.6 percentage points faster than the January-March period.
"The 2 percent quarter-on-quarter growth and 7.5 percent year-on-year growth show that China's policy to pursue steady growth has shown effect," said Qi Jingmei, senior economist at the State Information Center.
"Although the 0.1 percentage point increase is not much, the quality of the growth has been improved," said Zhao Xijun, vice-dean of the school of finance at Renmin University.
Since the beginning of the second quarter, the Chinese government has rolled out a series of policies to promote steady growth, structural readjustment and further reform. Stimulus measures include reducing the reserve requirement ratio for commercial banks, stepping up with fiscal tax reform and the 20 measures to boost foreign trade.
These measures have had a positive influence on stimulating the vitality of the economy and improving growth stabilization, said Zhao.
Outperformed tertiary sector indicates improved economic structure
Economic structure continues to be optimized as growth of the tertiary sector outperformed the primary and secondary industries during the first half of the year.
According to NBS figures, the added value of the tertiary industry accounted for 46.6 percent of GDP, up 1.3 percentage points from the same period last year. The figure is also 0.6 percentage points higher than the secondary industry.
Meanwhile, domestic demand is playing a bigger role in spurring growth, with consumption contributing to 52.4 percent of GDP in the first half, or 0.2 percentage points higher than the same period last year, said Sheng at NBS.
"It indicated a transition from industry-led growth to service-led growth in the Chinese economy," Sheng said. "It will bring profound and far-reaching implications to economic growth and the job market."
Sheng also highlighted new growth drivers, as they have offset the negative influence from China's property downturn and adjustment in some of the heavy industrial sectors.
According to Sheng, China has been working to increase the role of technology innovation in spurring growth, and its efforts have shown some effects such as surging online sales and growth in the high-tech sector.
NBS announced China's online retail sales increased by 48.3 percent year on year in the first half, hitting 1.14 trillion yuan. Value added output of the high-tech sector rose by 12.4 percent, 3.6 percentage points higher than the average growth rate of all industrial sectors.
Premier Li has repeatedly stressed the importance of growth quality and referred to it as the mainspring of China's growth.
"As long as the growth generates jobs and income, as long as the growth has quality and efficiency, as long as the growth is energy-efficient and not inflated, whether the growth rate is higher or lower than 7.5 percent, we can accept it," Li Keqiang said at a seminar after the data release.
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