The economic data for July revealed a key trend!, Recovery Behind Slowing Growth | Indicators | Economy

Mini examination

The results of the second half of this year's Chinese economy opening "quiz" have been announced.

Although the growth rate of some indicators slowed down in July, expert analysis suggests that the stable recovery momentum of the Chinese economy has not changed, and policy "combination punches" will continue to exert force.

Economic stability and recovery, strong service consumption

Turning to the economic report card in July, some indicators such as the added value of industries above designated size, total retail sales of consumer goods and fixed assets investment continued to grow or recover year on year, but the growth slowed down.

Fu Linghui, spokesperson for the National Bureau of Statistics and Director of the Comprehensive Department of National Economic Statistics, explained that the slowdown in the growth rate of some major indicators in July was a normal fluctuation between months. He emphasized that overall, the production demand maintained stable growth in the month, employment and prices remained stable, industrial upgrading was steadily advancing, people's livelihoods were effectively guaranteed, the national economy continued to recover, and the overall trend continued to be positive.

There are many data in the above transcripts that can support this judgment.

In terms of domestic demand, summer tourism and other service consumption have significantly rebounded, providing significant support for expanding consumption. From January to July, the service retail sales increased by 20.3% year-on-year; Retail sales of consumer goods continued to grow, with a year-on-year increase of 2.5% in July.

According to official calculations, the proportion of service consumption in the per capita consumption expenditure data of Chinese residents has exceeded 40%. Pang Ming, Chief Economist and Research Director of JLL Greater China, pointed out to China News Agency that the first service retail sales data released this month once again confirms that the recovery of service retail has been faster than that of commodity retail this year, with a strong momentum.

Pang Ming analyzed that consumption of services such as education, healthcare, transportation, communication, and cultural entertainment is not included in the traditional statistics of total retail sales of consumer goods. Therefore, although summer travel and related service consumption are very popular this year, there is a certain gap in social zero data. "In fact, the recovery momentum of service retail in July was very strong."

In addition, as China enters the stage of transforming and upgrading traditional industries and developing emerging industries, the driving force of new driving forces on the economy continues to strengthen, and they often carry the imprint of "innovation" and "green".

Fu Linghui gave an example that high-end manufacturing and intelligent manufacturing are growing rapidly. From January to July, the added value of industrial aerospace equipment manufacturing industry above designated size increased by over 20%. The driving effect of green transformation is evident, with wind turbine production increasing by 29.7% and charging pile production increasing by over 20% in July, gradually becoming a new economic growth point.

Dealing with internal and external challenges

Policy "Combination Fist" Effort

However, while China's economy continues to recover steadily, some data also reflect challenges: not only is the external situation more complex, but domestic demand still needs to be nurtured.

Since the beginning of this year, the overall growth of the world economy has been sluggish, global trade and investment have slowed down, and the contraction of external demand has increased the constraints on China's foreign trade growth. In July, the total import and export volume of goods decreased by 8.3% year-on-year. Among them, exports decreased by 9.2%.

At present, the consumption psychology of domestic residents is still in the process of switching, and the expenditure on some durable goods is also more cautious than usual. In July, the total retail sales of consumer goods increased by 2.5% year-on-year, a decrease of 0.6 percentage points from the previous month, mainly due to the slowdown in automobile sales.

Focusing on key issues in economic operation, the government has successively launched policies to promote household and electronic product consumption, support new energy vehicles and other consumption promotion policies, and introduce policies to accelerate the construction of charging infrastructure and promote private investment to expand investment.

Recently, relevant departments have been actively planning and implementing reserve policies to promote economic recovery, such as guiding market interest rates to decline, promoting the transformation of urban villages in mega cities, and the construction of public infrastructure for both emergency and emergency use. Policy measures have also been gradually introduced.

Experts believe that a series of policy effects are gradually becoming apparent, which will help promote economic recovery and improvement. To excel in this combination of punches, it is necessary to pay more attention to synergy and targeting.

Zhou Maohua, a macro researcher at the Financial Market Research Department of Everbright Bank, pointed out that the anti cyclical adjustment of macro policies has increased, but currently the domestic recovery is unbalanced, overseas demand is slowing down, and policies are tightening. Domestic monetary policy needs to balance multiple goals, taking into account short-term, medium and long-term, as well as internal and external balance. This requires strengthened coordination between macro policies and precise and powerful monetary policies.

In the view of Ding Shuang, Chief Economist of Standard Chartered Bank in Greater China and North Asia, both monetary and fiscal policies will not be absent in the process of strengthening countercyclical regulation. At present, monetary policy is relatively loose, and the next step will focus on enhancing the endogenous driving force of the economy and forming more real demand for credit. Compared to others, the necessity of fiscal policy is greater, and it is expected that the government will accelerate the issuance and use of local government special bonds.

"Efforts to expand domestic demand, boost confidence, and prevent risks are still the focus of macroeconomic policies." Pang Ming believes that there is still room for reasonable relaxation and timely strengthening of various macroeconomic policies, and there is also room for improvement in the synergy, combination, targeting, and effectiveness of macroeconomic policies. It is expected that in the second half of the year, emphasis will be placed on a more powerful, moderate, and effective macroeconomic regulation system, as well as innovative and efficient regulatory measures and tools.