China maintains growth forecasts despite rocky conditions
Article 2 minute read

China maintains growth forecasts despite rocky conditions

05 August 2013

China’s leaders have issued a statement of reassurance over the country’s growth rates, claiming that the economy will continue to expand despite “highly complicated” domestic and international conditions.

A statement released after a meeting of the Politburo suggests China will maintain steady expansion in the second half of the year, which has been backed up by new figures from the non-manufacturing Purchasing Managers’ Index (CPMINMAN) showing the first pickup in growth since March. While this adds to signs the world’s second-largest economy may be stabilising after a two-quarter slowdown, China’s leaders remain cautious about future growth rates.

“The global economy is in the middle of a major adjustment, and the domestic and international environment is highly complicated,” the Communist Party of China’s statement said, adding, “we need to prepare for all kinds of complicated and difficult situations.”

Many of the key economic indicators remain within reasonable distance of official targets. Steady economic growth coupled with stable prices and healthy employment rates suggest there is no need for distress just yet. But a separate statement from a meeting of senior leaders said the government would be on the lookout against financial risks and will be addressing the overcapacity that plagues some industries.

China’s economy grew 7.5% from a year earlier in the April-June period, slowing for a second straight quarter and extending the longest streak of sub-8% expansion in at least two decades, Bloomberg reports. The 2013 expansion target stands at 7.5%, with new measures being rolled out by the government to support small and medium-sized enterprises (SMEs), boost infrastructure investment and reduce tax rates.

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