GDP Growth Rate "Willing" Callback In The Second Half Of The Year To Prevent The Decline

Data released by the National Bureau of Statistics yesterday showed that China's GDP grew by 10.4% over the first half of the year, and the growth rate dropped by 1.8 percentage points over the same period last year.

The National Bureau of statistics believes that the economy is still developing steadily and rapidly, but the market is worried that the risk of continued economic downturn will intensify.

Economic microcosmic performance is not optimistic.

The first half of the year's economic data depicts such a picture: China's economy is facing double pressures of slowing growth and continuing inflation pressure, while exports, industrial growth and profit growth have all declined, and the micro economic performance is not optimistic.

Data released yesterday showed that the GDP growth rate in the two quarter reached 10.1% over the same period last year, although it still maintained a two digit growth rate, but it was 0.5 percentage points lower than the 10.6% level in the first quarter.

In terms of inflation, driven by the fall in food prices, the CPI rose from 7.5% in May to 7.1% in June, but the PPI rose sharply in June to 8.8%.

In terms of industrial production, in the first half of the year, the added value of industrial above designated size increased by 16.3% over the same period last year, down 2.2 percentage points from the same period last year. Investment, fixed assets investment in cities and towns was 58436 billion yuan, an increase of 26.8%, accelerating 0.1 percentage points.

Taking into account the three major impacts of China's continuous snow disaster, earthquake and slowing external demand in the first half of the year, Li Xiaochao, director general of the comprehensive Bureau of the National Bureau of statistics, concluded: "if there are any characteristics, I can summarize them in three sentences.

The first sentence is developing in the direction of expectation; the second sentence is very difficult; the third sentence is obvious in macroeconomic regulation and control.

For China's economic turning point, Li Xiaochao said, we should see that the economic growth rate falls in line with the expectation of macroeconomic regulation and control, and the fall is also a steady fall and structural adjustment in the fall.

Maintain established regulatory policies

As for the next policy trend, the external judgment should be consistent with the keynote issued by the finance and Economic Commission of the National People's Congress before hearing the report of the five ministries in the first half of the year.

The keynote of this keynote is: we should continue to adhere to a prudent fiscal policy and tight monetary policy, while paying attention to grasping the intensity and rhythm of policy implementation so as to avoid the ups and downs of the economy.

The outlook for inflation in the second half of the year remains uncertain.

Sun Mingchun, an Asian economist at Lehman brothers, said yesterday that the price increase caused by floods and electricity and oil prices could trigger a rebound in CPI growth in July.

He believes that the government and the central bank may at least insist on tightening in the next 2~3 months.

Li Xiaochao said that China's economy is facing two big pressures of inflation and employment and needs to choose an ideal balance point.

Now inflation expectations are relatively strong, the second half of the price rise is still relatively high, the initial estimate will affect consumer prices rose 1.8 percentage points.

Shen Minggao, chief economist of Citibank, said in an interview with the newspaper yesterday: "the government may relax in the quantitative target control of the economy, but it will strictly control the price regulation.

Some places need to be carried out, and some places must be strictly controlled.

Shen Minggao said: "part of the financial relaxation is affirmative, including focus on strengthening the credit of SMEs.

As for whether or not the export tax rebates will be raised, I think we should be cautious, because the short-term increase may ease the business difficulties of export enterprises, but the problem of trade imbalance will follow.

Sun Mingchun believes that as the impact of the global economic slowdown is more pronounced, China's economic growth will significantly weaken in the second half and 2009.

Continued tightening will also slow down real investment growth, while high inflation and falling share prices may eroding real consumption growth through negative wealth effects. Therefore, GDP growth is expected to slow to 8% in 2009.