Recovery set for further momentum

2024-06-29 09:08:50China Daily Editor : Li Yan ECNS App Download

China's economic recovery is poised for further momentum, given strong policy stimulus and the gradual recovery in confidence and expectations, government officials and experts said.

Their comments came as S&P Global Ratings affirmed unsolicited "A+" long-term and "A-1" short-term foreign and local currency sovereign credit ratings on China. The outlook on the long-term rating is stable, the rating agency said.

On Friday, the benchmark Shanghai Composite Index gained 0.73 percent to close at 2967.40 points, while the Shenzhen Component Index ended 0.01 percent lower.

"The stable outlook on the long-term rating reflects our view that the Chinese economy will return to self-sustaining growth of above 4 percent over the next few years, paving the way for smaller annual increases in net general government debt," the rating agency said in a report on Thursday.

In an online statement on Thursday, an official from the Ministry of Finance said the S&P Global Ratings' decision to maintain "A+" long-term and "A-1" short-term foreign and local currency sovereign credit ratings on China reflects the rating agency's recognition of the resilience and development prospects of China's macroeconomy.

The move also shows the independence and professionalism of its rating team, the official said.

"As S&P Global Ratings said, China's economy, although facing some problems and challenges, will continue to maintain stable growth in the future as macro policies take effect," the official said.

"China has multiple advantages, such as a large market size, strong endogenous vitality, solid development foundation, rapid development of new momentum and efficient supplies of various resources, in addition to the continuous optimization of macro adjustment policies by the Chinese government to strengthen countercyclical and cross-cyclical adjustments.

"That will further enhance endogenous development strength, and consolidate and enhance the positive momentum of economic recovery."

The official also recalled that the World Bank and the International Monetary Fund have recently raised their forecasts on China's economic growth.

Li Peijia, a senior analyst at Bank of China, said she expects China to achieve around 5.2 percent economic growth in the third quarter, given stronger new development momentum and growing endogenous vitality.

"China has injected fresh impetus into economic growth in the first half of the year by implementing more proactive fiscal policies and accelerating the development of new quality productive forces," Li said.

"The country's competitiveness in exporting high-end product has further increased, while consumer expectations have been continuously growing, as reflected by the robust performance of goods consumption in areas like home appliances and communication equipment."

Although Chinese exports to the United States have declined, growth in exports to other emerging economies such as Mexico and Vietnam has made up for it. Besides, more positive signs have appeared in the real estate market, she said.

Dong Ximiao, chief researcher at Merchants Union Consumer Finance, said better implementation of policies already in place will further improve the real estate market and promote overall economic recovery. China is expected to achieve the growth target of around 5 percent for the year, or even register higher growth rate.

To pursue economic transformation and high-quality development in a better way, however, the country needs to further deepen reform and expand high-standard opening-up, and be alert to factors that can exert downward pressure on the economy, he said.

S&P Global Ratings said China's policy implementation can be very effective and rapid when incentives are aligned well. The country's continued growth will likely benefit from rapid improvements seen in public infrastructure across the country over the past couple of decades.

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