Business / View

Key growth targets well within reach

By Luo Jiexin and Xue He (China Daily) Updated: 2014-07-28 20:37

With a smaller base in the second half, trade is expected to do better.

In addition, external markets have been improving in recent months. In the United States, China's largest single-country export market, it is becoming clearer that the economic recovery is solidifying. After cold weather reduced production and consumption at the beginning of the year, business activity revived in the second quarter. The purchasing managers index, which gauges manufacturing activities, hit 55.2, a remarkable increase from 52.7 in the first quarter.

US retail sales grew 4 percent year-on-year from March to May, much better than the 1.6 percent in the January-February period. Rising US consumption is an especially good sign for Chinese exports.

Europe, another major Chinese export market, did not do as well as the US, but the continent is also undergoing a weak recovery. Its consumption rose in the second quarter and the labor market improved slightly. The scenario points to steady demand for Chinese products.

With China's trade performance stabilizing and probably improving, the yearly economic growth target of 7.5 percent is well within reach.

Since GDP growth had slowed to 7.4 percent by the end of March, the government has introduced a number of policies to boost the economy. Collectively called mini-stimulus, these measures included increased investment in railways, affordable housing and agriculture. Their effects are expected to surface in coming months.

More important, the central government has visibly loosened its monetary stance. Since April, it has decreased the required reserve ratio for lenders twice, marking a significant turnabout in its policy orientation. Although the ratio cuts were for selected industries and selected lenders, this "targeted loosening" approach is expected to become normal if economic growth slows again.

Key growth targets well within reach Key growth targets well within reach
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