BEIJING, Aug. 1 (Xinhua) -- China's economy will maintain a trend of steady growth in the second half of this year, said foreign financial institutions, quoted by the Xinhua-run Shanghai Securities News.
According to data of the National Bureau of Statistics (NBS), China's GDP registered a year-on-year growth of 6.8 percent in the first half of the year with a growth of 6.7 percent in the second quarter, maintaining a medium-high growth rate of 6.7 percent to 6.9 percent for 12 consecutive quarters.
Many foreign banks not only admitted the robust growth of China's economy in the first half of this year, but also share a positive outlook on steady growth in the second half of 2018. They generally expect that China will achieve its basic target for the annual GDP growth rate.
-- China's economy registers long-term and steady growth
Under the complicated conditions of global economy, steady economic fundamentals have become a driving force pushing ahead China's economy into the track of high-quality development.
"From the perspective of import, the second half of the year will witness a robust growth in general," said Ding Shuang, chief economist of Greater China and North Asia at Standard Chartered Bank. According to him, while the import growth is driven by the enormous domestic demand, the upcoming policies on expanding domestic demand will provide some support for import.
In terms of export, China's export has registered a strong growth in recent months, said Gao Ting, a senior UBS Securities analyst, adding that since the beginning of the year, export has kept a growth rate of about 13-14 percent, which is significantly higher than last year, and the foreign exchange reserve is relatively stable.
The exchange rate for the Renminbi against US dollars has seen a quick rebound since late June.
Against the background of a stronger dollar, the Renminbi exchange rate driven by market forces will indeed fluctuate within a certain range, Ding noted, adding that despite such fluctuation, we should be aware that the exchange rate for Renminbi is relatively stable against a basket of currencies.
According to Zhu Haibin, chief China economist at JPMorgan Chase, China adopts a managed floating exchange rate regime based on market supply and demand, and regulated according a basket of currencies. The current adjustment of exchange rate has no essential deviation from this principle, Zhu said.
In addition, foreign institutions have been enthusiastic about "going on a shopping spree" for Chinese bonds since this June. According to the latest data, China’s outstanding Renminbi bonds under custody and registered with China Central Depository and Clearing Co. (CCDC) has reached 1,295.857 billion yuan by the end of June. While continuing to break historical record, the holdings for Renminbi bonds have seen an increase of 87.085 billion yuan in June compared with May, a record high of the year, which further proved the long-term confidence of overseas institutions in the Renminbi exchange rate and in China's economy.
-- Strong internal potentials will continue to drive growth
According to the data released recently by the NBS, the total retail sales of consumer goods in China reached 18 trillion yuan in the first half of the year, up 9.4 percent year on year, and the final consumption expenditure contributed 78.5 percent to the economic growth, 14.2 percentage points higher than that in the same period of last year.
China has a broad market, and the demand for consumption upgrading has become a determinant for economic growth.
Standard Chartered expects that China will maintain a GDP growth of 6.5 percent and above throughout 2018, while JPMorgan Chase is even more optimistic about China's GDP growth in the second half of the year.
As a key indicator for the capital cost of real economy, the weighted average lending rate in the first quarter of the year increased by 22 basis points to 5.96 percent.
Citibank China Chief Economist Liu Ligang said this data showed that China not only needs to help some enterprises solve the problem of difficult and expensive financing to put more funds in the real economy, but also should place the focus of deleveraging on structural policy support instead of comprehensive relaxation.
"At present, the People's Bank of China has adopted several structural monetary policies, including the two recent targeted reserve requirement ratio (RRR) cuts. The first cut is targeted at small and micro enterprises and greening and environmental protection, and the second cut is to support the debt-to-equity swap program," said Zhu, who believes that the People's Bank of China is paying more attention to structural issues.
At the macro-policy level, Standard Chartered believes that monetary policy emphasizes “not too tight or too loose” and maintains ample liquidity, and its positive impact will emerge next year.
Liu also pointed out that the RRR cuts by the People's Bank of China are forward-looking and there is the possibility for another cut to prevent further increase in capital cost. In his view, this will be very helpful for the liquidity of the banking system, especially for some small and medium banks.
In general, foreign financial institutions generally believe that China has a strong capability to stabilize macro economy. (Edited by Yang Yifan, yangyifan@xinhua.org)
A single purchase
