Growth set to reach 6.8 to 6.9%

A worker at a steel plant in Dalian, Liaoning province. [Photo by Liu Debin/For China Daily]

National Bureau of Statistics official sees fast expansion in H1

China's economic growth could reach 6.8 or 6.9 percent in the first half of this year, a senior national statistics bureau official said on Wednesday.

"China is expected to achieve relatively fast GDP growth of 6.8 or 6.9 percent in the first half of this year," said Pan Jiancheng, deputy head of the China Economic Monitoring & Analysis Bureau of Statistics, which is affiliated to the National Bureau of Statistics.

China's growth was "better than expected and more optimized in structure" in the first six months, featuring improving indicators, increasing jobs, stable prices and a sound balance of international payments, Pan told the Chinese-language Securities Times newspaper.

He said industrial output growth was on the rise and consumption has become a major pillar of growth, indicating that the economy's inherent growth momentum is strengthening.

China's GDP expanded at higher-than-expected 6.9 percent year-on-year in the first quarter. The NBS is scheduled to release the second-quarter GDP growth on July 17.

Lian Ping, chief economist of Bank of Communications, predicted on Wednesday that China's second-quarter year-on-year GDP growth may stand at 6.8 percent and gradually ease to 6.7 percent and 6.6 percent in the third and fourth quarter, respectively.

Despite the growth moderation, Lian told an economic forum that there is little possibility that China's economy will suffer a hard landing this year, due to the nation's supportive macroeconomic policies, improved exports, and tightened financial regulation that is set to drive capital into manufacturing and other non-financial sectors.

Pan from the NBS said that growth in the second half of this year may ease due to the higher base of growth in the same period of 2016, possible weakening of the real estate sector and changes in the international trade environment, but there should be no doubt that the country would meet its growth target of "around 6.5 percent" for this year.

Despite its stable growth prospects, China faces some challenges, Pan said.

Although local governments have adopted various price control measures to prevent home prices from continuing to rise in major cities, expectations of further rising prices, especially in smaller cities, remain strong, which has led to increased real estate investment, he said. Since it is mainly financed by bank loans, such investment may raise the level of leverage and increase risks for the financial sector, he warned.

Meanwhile, growth in China's service sector weakened in June, according to the results of a key private survey released on Wednesday.

The Caixin/Markit services purchasing managers index (PMI) dropped to 51.6 in June from 52.8 in May, but remained above the line of 50 that demarcates expansion and contraction.

Pan from the NBS said that China's service sector remains stable at high levels and provides solid support for the country's overall economic stability.