Economy to maintain steady growth trend

0 Comment(s)Print E-mail China Daily, May 8, 2019
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Consumers select food at a supermarket in Shanghai, east China, April 15, 2019. [Photo/Xinhua]

The Chinese economy is projected to grow steadily this year, with full-year GDP growth rate likely to reach 6.4 percent year-on-year, investment bank JPMorgan said on Tuesday.

"We expect China's economy to retain the current rather solid growth momentum over the second and third quarters, growing at 6.4 percent and 6.5 percent, respectively," said Jing Ulrich, vice-chairwoman of Asia-Pacific at JPMorgan Chase & Co.

Growth is projected to ease to 6.2 percent in the fourth quarter, as support from fiscal policy may gradually weaken by the end of the year, Ulrich said at a news conference on Tuesday.

"We think there is no need for China, for the moment, to further loose its macro policies, as confidence in economic prospect is increasingly stronger," Ulrich said, citing the recovery in the purchasing managers indexes.

The official manufacturing PMI stood at 50.1 in April and 50.5 in March, indicating that business activities in the manufacturing sector have expanded for two months in a row, according to the National Bureau of Statistics.

Ulrich added that there are at present many uncertainties in Sino-US trade talks, making it too early to give precise estimates of how the trade friction will impact China's growth.

However, in the mid-to-long term, global investors' appetite for renminbi assets is not likely to be changed by twists and turns in the trade talks or other short-term factors, Ulrich said.

"I think in the worldwide asset allocation of overseas investors, (the proportion) of assets in China and renminbi-denominated assets will only go up, rather than go down."

The proportion of renminbi assets in global investors' portfolios is still "very little", especially when compared with the Chinese economy's proportion in the global economy, she said.

Also, with China's various reforms to support financial opening-up, foreign investors will be more confident and capable of investing in China's financial markets, she added.

As for this year's A-share market, Ulrich said she holds an overall optimistic attitude, considering supportive macro policies, the mild economic recovery, as well as the "attractive" valuation.

Moreover, the rather stable performance of the renminbi, policy support for financing in the capital market, and the US Federal Reserve's retreat from further rate hikes will also underpin market prospects.

In the short term, however, the A-share market may witness fluctuations and remain highly sensitive to news on the Sino-US trade talks, Gao Ting, head of China Strategy at UBS Securities, said in a note on Tuesday.

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