China pledges to protect its economic security and expects 5% growth
President Xi Jinping said China will protect its national economic security, and that it will continue to stimulate imports and liberalize market access, China Central Television reported on Wednesday.
Xi made the remarks while chairing a group study session at a meeting of the Political Bureau of the Communist Party of China Central Committee.
China will take strong measures to prevent and resolve major risks, Xinhua News Agency reported on Wednesday, citing the meeting. The country will strengthen anti-corruption efforts related to state-owned enterprises and the financial sector, according to the meeting.
On the other hand, an advisor to the Chinese Central Bank said on Wednesday that China is expected to achieve economic growth of slightly more than five percent this year.
Wang Yiming, a member of the Monetary Policy Committee of the People’s Bank of China, told an economic forum that the economic situation in China is completely different from the situation in Japan in the 1990s, and there is no basis for fear about the so-called “Japanese transformation.”
Some analysts believe that the Chinese economy, burdened by real estate deflation, high debt and an aging population, is heading towards a Japanese-like picture, which points to Tokyo’s “lost decades” of economic stagnation since the 1990s.
“There is no such transformation in China, and we are still in the medium to high growth stage,” Wang said. The government has set a growth target of about 5 percent for 2023.
In a separate context, the profits of Chinese industrial companies continued to decline during the first eight months, but the pace of decline declined slightly with the start of a series of policy support steps to stabilize parts of the faltering economy.
The decline in profits narrowed to 11.7 per cent year-on-year, from a 15.5 per cent contraction in the first seven months, in line with expectations, and perhaps a sign that a modest recovery is starting to take root for some companies.
Data from the National Bureau of Statistics on Wednesday showed that this was supported by August profits, which recorded a surprise rise of 17.2 percent from the previous year, while profits fell by 6.7 percent in July.
Bruce Pang, chief economist at Jones Lang LaSalle, said: “These data reflect that domestic demand has stabilized, and that the supply and demand sides have witnessed a balanced recovery.”
“A series of policies to promote macroeconomic recovery” boosted last month’s earnings, Yu Wenying, a statistician with the National Bureau of Statistics, said in a statement.
Profits of 30 out of 41 major industrial sectors improved during this period, with losses in the raw material manufacturing industry shrinking significantly due to rising commodity prices and a recovery in demand. 28 out of 41 industries saw a decline in their profits from January to July.
As Beijing intensifies support for its faltering economy after a brief post-Covid-19 recovery, recent data has shown signs of stabilization, with stronger-than-expected bank lending and improved industrial production and retail sales growth for the month of August… However, continued weakness in the real estate sector – which… Hit by the crisis and a quarter the size of the world’s second-largest economy – it remains a drag on growth.
Last month, new home prices in China fell at the fastest pace in 10 months. Easy borrowing rules are showing signs of providing a boost in new home sales in some major cities such as Beijing, but concerns remain that the improvement may be short-lived. The concern is that lower confidence in the real estate sector could undermine the overall demand outlook for businesses and the economy.
Details of the National Bureau of Statistics data indicate that there is still a long way to go for Beijing to achieve a strong rebound in overall profit growth. The data showed that the profits of state-owned companies fell by 16.5 percent in the first eight months, and fell by 11.1 percent for foreign companies, while private sector companies saw their profits shrink by 4.6 percent.
The industrial profit figures cover companies with annual revenues of at least 20 million yuan ($2.75 million) from their main operations.
On the other hand, separate data from the Bureau of Statistics showed that China’s service sector output grew by 5.7 percent annually last month. The sector’s output also increased during the first seven months of the current year by 8.3 percent annually.
For its part, the People’s Bank of China continued on Wednesday to pump large amounts of cash into the banking system through reverse purchase operations.
After pumping 378 billion yuan (about 52.72 billion dollars) on Tuesday through 14-day reverse repurchase operations with an interest rate of 1.95 percent, and on Monday pumping 319 billion yuan (about 44.47 billion dollars) according to the same mechanism, the central bank announced on Wednesday the injection of 417 billion yuan (about 44.47 billion dollars) according to the same mechanism. 1 billion yuan through reverse purchase operations with the same rules, and injected 200 billion yuan through 7-day reverse purchase operations at an interest rate of 1.8 percent.
A statement from the Central Bank said that this step aims to maintain acceptable and abundant cash liquidity in the banking system. Reverse repurchases, known as “reverse repo,” are operations in which the central bank buys securities from commercial banks through bidding, with the agreement to sell them again in the future.
2023-09-27 14:27:08
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