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Business
Recovery consolidates as consumption, investment pick up
  ·  2020-08-23  ·   Source: NO.35 AUGUST 27, 2020

 

A worker operates equipment on the production line of a wood company in Caofeidian, a district in Tangshan, Hebei Province in north China, on August 17. Since 2014, Caofeidian has signed 371 projects with Beijing as part of the efforts to relocate industries from the capital, with the total investment reaching 480.25 billion yuan ($69.3 billion) (XINHUA)

China's economy continued its robust recovery in July, with key indicators continuing to trend upward, and the revival is expected to extend through the rest of the year amid efforts to buoy domestic demand.

Retail sales, a gauge of consumption growth, rose 0.85 percent month on month to reach 3.22 trillion yuan ($463.99 billion) in July, maintaining a six-month streak of expansion after a contraction of 10.91 percent in January, the National Bureau of Statistics (NBS) said on August 14.

"The retail sales of commodities edged up 0.2 percent year on year in July, registering positive growth for the first time this year," NBS spokesperson Fu Linghui said, adding that the pace of online sales has also accelerated.

Other key economic indicators also showed signs of a rebound, with Fu attributing the recovery to supporting policies to coordinate epidemic control and social and economic development.

The value-added industrial output rose 4.8 percent year on year in July as factories stepped up production with effective epidemic control. Meanwhile, fixed assets investment went down 1.6 percent year on year during the January-July period, narrowing from the 3.1-percent decline in the first half of the year.

Fu said that the economic recovery still faces external pressure amid the global spread of the novel coronavirus disease, highlighting the need to expand domestic demand.

The country has introduced a string of measures, such as offering vouchers, expanding the coverage of e-commerce in rural areas and cultivating new business models to release pent-up demand.

"With higher consumer confidence and expectation, the consumer market will maintain its recovery momentum in the second half of the year," said Chen Lifen, a researcher with the Ministry of Commerce.

To further revive the economy, the country has introduced an array of measures, including more fiscal spending, tax relief and cuts in lending rates and banks' reserve requirements to revive the coronavirus-ravaged economy and support employment.

"The pace of the economic recovery largely depends on the effect of the policy of expanding domestic demand, while bolstering investment plays a pivotal role," said Zhang Liqun, a researcher with the Development Research Center of the State Council.

Experts believe that the full delivery of the strategy of expanding domestic demand, along with the relevant supporting policies, will become the backbone of China's economy in the second half of the year.

"The country should give full play to the basic role of consumption and the crucial role of investment," said Guan Lixin, a researcher with the Chinese Academy of International Trade and Economic Cooperation.

Guan suggested more efforts to establish a dual-circulation development pattern that takes the domestic market as the mainstay while the domestic and foreign markets boost each other.

Since May this year, the top leadership of the country has reaffirmed the dual-circulation development pattern on various occasions, indicating the strategic priority of accelerating the shift from an export-led to a domestic demand-driven growth model.

This is an edited version of an article published by Xinhua News Agency

Copyedited by Madhusudan Chaubey

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