The Chinese economy is forecast to see solid growth in the second half of the year, bolstered by buoyant consumption, the nation's top economic regulator said. The prediction is expected to soothe concerns about the escalating trade dispute with the United States.
"In the first six months, consumption retained growth momentum and has played a key role in supporting economic growth as consumption has become a key element of the nation's rebalancing act," Liu Yunan, a senior official with the National Development and Reform Commission, said on Thursday.
Consumption contributed 78.5 percent of total economic growth in the first half, up by 14.2 percentage points compared with the same period last year, according to the National Bureau of Statistics.
Economic growth remained solid at 6.8 percent in the first half, with residential income growth holding steady, supporting relatively robust consumption, according to the NBS.
The report comes at a time when the tepid growth of some indicators has raised concerns over China's rebalancing moves toward domestic consumption as trade troubles with the United States have escalated and uncertainties in the global economy have increased.
The growth of retail sales slowed in recent months, a key indicator reflecting how spending by residents is holding up.
Liu said retail sales growth has been dragged down by some seasonal factors and delays in automobile purchases as residents looking forward to tariff cuts held onto their cash. The government pledged to cut import tariffs on automobiles and auto parts this year.
Despite some external challenges, spending is expected to see a rebound in coming months with downward dips remaining under control, according to Liu.
To promote continued expansion of domestic consumption, the government will roll out more supportive measures to increase consumption demand, such as continuing to promote supply-side reforms, providing better products and fostering a more vibrant private sector, according to Ou Xiaoli, another senior official with the commission.
While concerns remain that rising trade conflicts may result in higher prices on some goods for consumers, experts expected the overall effect to be limited.
Niu Li, an economist at the commission's State Information Center, said the government will provide some level of support to cushion risks of possible price increases on agricultural products.
He said he expected consumer inflation to remain at roughly the same level as in the first half.