China’s ruling Politburo pledged to stabilize growth while pressing on with economic reforms after exports fell by the most since the global financial crisis and manufacturing and investment cooled.
Authorities will maintain steady second-half expansion amid “extremely complicated domestic and international conditions,” the official Xinhua News Agency said yesterday after a meeting led by President Xi Jinping. China will keep a prudent monetary policy and a proactive fiscal stance, Xinhua said.
China is targeting 7.5 percent growth this year, a goal that could be under threat after a second straight quarterly slowdown. Authorities also want to counter mounting debt risks, with policy makers ordering an audit of government borrowing this month and engineering a money-market cash squeeze in June to encourage banks to better manage liquidity.
“The policy focus will shift to stabilizing growth in the second half,” in line with recent remarks by Premier Li Keqiang, said Shen Jianguang, chief Asia economist at Mizuho Securities Asia Ltd. in Hong Kong. The economy will bottom out in July and August and the government will use fiscal and monetary policy to support growth, Shen said.
Li said last week that the nation will speed railway construction, especially in central and western regions, according to a Xinhua story. He said at a recent meeting with economists that 7 percent expansion is the “bottom line” and the nation can’t allow growth below that, while 7.5 percent is the “lower limit” for gross domestic product growth, the Beijing News reported last week.