A worker at a plant in Yancheng, East China's Jiangsu Province (Photo: VCG)
China's slowdown in the second quarter of this year is in line with the country's moves to adjust its economic structure, with the economy remaining steady and sound amid uncertainties, experts said on Tuesday.
In July, the total value-added growth of industrial enterprises with annual revenue of 20 million yuan ($2.9 million) or above was up 6 percent year-on-year, the same level as in June, data from the National Bureau of Statistics (NBS) showed on Tuesday.
However, economic indicators for retail sales of consumer goods, fixed-asset investment and the Index of Services Production for July were slower than for June.
Also in July, total retail sales of consumer goods reached 3.07 trillion yuan, a rise of 8.8 percent year-on-year, but 0.2 percentage points slower than in June. Meanwhile, the investment in infrastructure increased by 5.7 percent in the first seven months year-on-year, 1.6 percentage points slower than in the first half of the year.
"We've already seen signs of a slowdown for the second quarter, causing some worries over possible slower economic growth in the next half of the year. But the July industrial data is not surprising for most people," Cong Yi, an economics professor at the Tianjin University of Finance and Economics, told the Global Times on Tuesday.
Liu Dongliang, a senior analyst at China Merchants Bank, told the Global Times in a note that the continuous slowdown in consumption has caused some concern, as it has predominantly stemmed from a slowdown in the growth of Chinese people's disposable income.
"As a result, the difficulty of stimulating [higher] consumption in the future will also increase amid a domestic economic slowdown and the trade war with the US," Liu said.
Recently, the tumble of the A-share market and the yuan's exchange rate have caused deep concerns, and the collapse of hundreds of peer-to-peer (P2P) platforms has made investors nervous.
"The biggest problem for China's economy, finance and markets is the problem of confidence," Jiang Xipei, chairman of Far East Cable Co, said during a debate organized by the State Council on Friday, cb.com.cn reported on Tuesday.
"The central government currently stresses the importance of stability, which shows that the authorities have recognized the problems embedded in the country's economy, such as the unstable stock market and investors' negative outlook on the financial market. But only by ensuring deepened reforms can confidence be increased among investors and new impetus injected into the market," Cong said.
"The good thing is that the Chinese government is fully aware of the problems in the financial market. If the problems can lead us to calmness and sobriety, it could be a good thing. And reform is also driven by problems," Cong noted.
Despite complex and severe internal and external situations, China will maintain sound and stable economic fundamentals as well as a trend of transformation, upgrading and structural adjustment, Liu Aihua, spokesperson for the NBS, said at a press briefing on Tuesday.
The main factor in the slowdown in growth is structural adjustment, which is needed to weed out the traditionally labor-intensive, resource-intensive areas of the manufacturing industry, Cong said. Upgrading the nation's industrial structure is a vital task, he added, and during this transition period, a temporary slowdown is unavoidable.
Liu, the NBS spokesperson, said that consumption spending still only accounts for 53.6 percent of GDP in China, well below the level of over 70 percent in developed countries, which shows that China's consumption sector has great potential.