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Top leadership plans for H2
( bjreview.com.cn )
Updated: 2013-08-05

A meeting held on July 30 by the Political Bureau of the Communist Party of China (CPC) Central Committee, the country's top decision maker, diagnosed the Chinese economy in the first half of 2013 and painted a blueprint for the latter half. The central authorities will continue to work toward stabilizing growth, restructuring the economy and promoting reforms.

The meeting, chaired by Chinese President and General Secretary of the CPC Central Committee Xi Jinping, reaffirmed existing policy stances while allowing for fine-tuning policy.

Top leadership plans for H2

A property project is under construction in Guiyang, capital of Guizhou province.

China's targeted GDP growth is 7.5 percent for the year and plans to add 9 million jobs to the economy. Statistics from the National Bureau of Statistics (NBS) show GDP growth in the first half slowed to 7.6 percent, with a 7.5-percent growth during the second quarter. A total of 7 million jobs were added to the job market during the first half.

With the growth rate in the second quarter falling right down to the government's target for the whole year, there are mounting concerns that a continuous slowdown means China won't meet its targeted GDP growth. Foreign observers also worry that a continuous slowdown will jeopardize global economic growth. Under this background, decisions made at the meeting will have vital significance for economic growth in the coming months.

Zhang Liqun, a research fellow with the Development Research Center of the State Council, said the meeting showed the intention of top policymakers to improve the quality of growth and shift the country away from a dependence on exports and investment and toward consumption.

Chu Jianfang, chief economist with CITIC Securities, agreed with Zhang, adding that the Chinese government will not allow the economic growth to fall below the whole-year target of 7.5 percent.

Expectations

The news of China's slowing growth during the first six months of the year caused a riot in the markets, with stocks further plunging. Many economists say the 7.5-percent growth in the second quarter is far lower than previous market expectations.

The Political Bureau meeting, however, praised China's economic achievements in the first half, adding that major economic indicators were within a reasonable range and socioeconomic development was off to a good start. Economic growth in the first half was stable, with generally stable prices, a stable job market, and a bumper harvest for summer grains, read a statement after the meeting.

The meeting revealed the following, says Chu. First, it was a judgment on the Chinese economy. Despite a protracted slowdown, the Chinese economy is still in good condition, with easing inflation pressure and a stable job market. Second, the meeting reiterates that China will keep the annual growth target set at 7.5 percent. Third, the meeting pointed out no major adjustment will be made regarding macroeconomic policies but fine-tuning is allowed to maintain stable growth.

Chu said the meeting hinted at reforms in taxation and some other areas, and cutting down on government bureaucracy would likely come in the second half.

Despite mounting concerns from the market, the Political Bureau said they believe the country has entered a period of steady and healthy economic development, noting that the economy will maintain steady growth in the latter half of the year.

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