The Chinese economy which started the year on a bright outlook after the government sought to create more than 50 million jobs in a span of five years until 2020. The Central Bank of China announced that they have increased their short-term interest rates while the People's Bank of China tightened their monetary policies unexpectedly in their efforts to help stabilize the country’s economy.
While China has been able to generate 13 million new jobs last 2016 from originally expecting to create around 10 million, a jump in Chinese exports data also helped boost the economy including the manufacturing and industrial sector among many others.
Ongoing Economic Recovery
According to data from the China National Bureau of Statistics, the economy of the second-largest economy is going stronger and has been growing increasingly more lately.
From analysts expectations of a 6.2% increase in industrial production, the sector grew by 6.3% during the past two months. China was also able to surpass expectations with their fixed asset investment sector which has grown by as much as 8.9% while the markets expected only around 8.2%.
The real estate investment sector also rise by 8.9% compared to last year which surprised the markets because of the cuts Chinese policy makers imposed on real estate purchases last year. The sector’s growth was also driven by the rise in the prices of materials.
Despite the rising economy in the middle of ongoing economic reforms in the country’s governance, economists stated that the National People’s Congress has failed to make any in-depth comments to the country’s economy outlook and that questions to whether how the government intends to transition from investment-led growth to a consumption-based economy.
China’s economy currently runs on investment growth as pointed out by several analysts and added that this would not be able to sustain the fiscal and monetary policy stand of the country this year.
Li: No Hard Landing For Economy
Chinese Premier Li Keqiang recently called out any forecasts of a hard landing for the country’s economy at his annual news conference at the end of China’s parliament annual meeting.
Li who said that he receives a forecast every single year of a possible hard landing for China’s economy after the markets raised their concern to whether how exactly the government intends to keep the economy up and resulted to the said forecast.
He added that the forecasts and so-called “prophecies” regarding a hard landing should end given the country’s economic performance in the past couple of years.
The country currently has a goal of a 6.5% economic growth this year compared to last year’s target of around 6.5-7% as the government continues to address rising debt levels and be wary of other financial threats. According to Li, the growth target will not be easy but will not be seen in a span of a long period either and that the country’s GDP growth of 6/7% last year could support his claim.
Li also said that the have prepared a number of policy tools to guard the growth against risks the whole year and assured that China’s financial system is currently stable and is facing no apparent systemic risks.
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