Li calls for fostering new engines of growth

Premier Li Keqiang has underlined the importance of fostering new growth engines and expanding effective investment to stabilize economic growth and the job market.

The country will continue with a proactive fiscal policy and a prudent monetary policy, Li said as he presided over a symposium on the economy on Monday.

Li called for efforts to create favorable conditions for more successful, private unicorn startups, high-growth gazelle companies and new champions and to accelerate the transition between old and new growth engines. Unicorns are privately held startups valued at over $1 billion; gazelles are fast-growing, often small and high-tech businesses.

More work must be done to speed up building major programs, eliminate hidden barriers to private investment and promote the upgrading of industries, he said.

China's GDP rose 6.2 percent in the second quarter from a year earlier, below the 6.4 percent expansion in the first quarter, the National Bureau of Statistics said on Monday. The bureau said the economy grew by 6.3 percent in the first half of the year, and over 7.3 million new jobs were created in urban areas.

Li said some economic indicators in the first quarter were better than expected, and the economic performance did not come easy.

The country is faced with sluggish global economic growth, weakening world trade and rising protectionism, which, coupled with domestic factors, has brought mounting downward pressure, he said.

He called for continuous efforts in promoting reform and opening-up, better use of countercyclical policies and stabilizing the expectations of businesses.

It is important to improve the transmission mechanism of monetary policy and reduce the financing costs of small and medium-sized enterprises and microbusinesses, he said.

The quality of consumer goods must be further improved, and the supply of high-quality services in elderly care, day care for infants, education and health should be increased, and Internet Plus life services must be expanded, he said. Internet Plus refers to policies to promote advanced digitalization.

He underscored the significance of adopting measures to stabilize and expand employment.

Li also reaffirmed China's commitment to develop a business environment that is in line with market principles, international standards and the rule of law, adding that the country will expand opening-up more proactively.

Liu Yuanchun, an economics professor and vice-president of Renmin University of China, said the first half's growth rate showed the economy's resilience.

He said industrial output of the private sector grew by 8.3 percent year-on-year in June, showing that the private sector was more resilient than expected.

"It also provided evidence that the confidence of entrepreneurs has grown," Liu said.

China's industrial output rose by 6.3 percent year-on-year in June, beating general market expectations, compared with 5 percent in the previous month, the NBS said.

However, Liu warned that downward pressure in the second half could be even higher with lackluster private investment and weak global demand.

Liu pointed out that private investment in the manufacturing sector, which only grew by 2.7 percent in the first half, provided signs of weak confidence in furthering investment.

Jiang Chao, an economist with Haitong Securities, said consumption has helped stabilize economic performance in the first half as retail sales rose by 8.4 percent year-on-year, compared with 8.3 percent in the first quarter.

To stabilize growth in the second half, there is still much room for the government to adopt measures to boost the nighttime economy, said Li Xunlei, chief economist with Zhongtai Securities. The nighttime economy is after-hours economic activity.