China's economy will continue to grow at a steady rate during the second half of this year despite "extremely complicated domestic and international conditions", the government said Tuesday. Leaders of the world's number two economy will "co-ordinate the tasks of stabilising growth, restructuring the economy and promoting reforms", according to a statement from the Political Bureau of the ruling Communist Party's Central Committee.
The announcement came after a meeting of the politburo attended by President Xi Jinping, the state news agency Xinhua said. "Macro policy should be stable, micro policy should be flexible and social policy should support the bottom line. All of them should be co-ordinated," the statement read.
As is standard for such announcements, the communist leadership provided few details on concrete plans for the economy but said a "proactive fiscal policy and prudent monetary policy" would remain. China's economy grew 7.5 percent year-on-year in April-June, slowing from the first quarter's 7.7 percent. This in turn was worse than 7.9 percent in the final three months of 2012. The economy is a key engine of global growth but last year recorded its worst performance since 1999, expanding 7.8 percent.
China's growth model has long been based on taking advantage of the country's cheap and abundant labour to manufacture products for export, alongside credit-fuelled domestic investment to develop infrastructure. Now, though, the government says the situation is unsustainable and the growth model should be rebalanced towards consumer demand. The new leadership under President Xi and Premier Li Keqiang appears willing to accept lower growth in hopes that weaning the country off its addiction to investment will ultimately result in stable and sustainable growth.
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