Big, bright spot in global economic landscape

"The Chinese economy has started to recover from the COVID-19-related restrictions. This might be one of the very few bright spots in the global economy right now," said Wang Qian, Vanguard's Asia-Pacific chief economist.

Wang said the US-based investment company expects China's economic growth to accelerate to about 4 percent year-on-year in the second half, compared with 2.5 percent in the first half.

The country's full-year economic growth may stand between 3 percent and 4 percent, she said, thanks to accelerated infrastructure investment, recovering consumer activity and accommodative macroeconomic policies.

Wang, however, said China's economic recovery is not without risks amid a global economic slowdown, which could mean weaker demand for China's exports of manufactured goods. Moreover, the economy also faces the challenges of COVID-19 uncertainties and a real estate downturn.

Data from the General Administration of Customs showed that China's export growth in dollar terms remained buoyant in July at 18 percent year-on-year, demonstrating the resilience of China's industrial chain.

The growth, nevertheless, could fall to single-digit numbers in the coming months due to a higher comparison basis, souring global demand and fading high export prices, meaning that the country should avoid counting exports as the main driver of economic recovery, experts said.

They further said efforts to boost domestic demand, especially fixed-asset investment, are instead expected to bring the advantage of China's vast domestic market into further play and act as the key for the Chinese economy to register stable growth amid intensified external uncertainties.

"Given the growing recession risks facing the world economy, especially in Europe and the United States, China's economy may feel the pressures of weakening external demand," said Cheng Shi, chief economist at ICBC International.

"Effectively expanding (domestic) investment will be crucial for China to fend off the external risks," Cheng said, adding that fiscal policy may play a major role in boosting investment while monetary policy is expected to continue structural support for businesses and residents' living conditions.

The Political Bureau of the Communist Party of China Central Committee, the Party's core leadership, had decided at a recent meeting that macroeconomic policies should play a proactive role in boosting demand, as part of the nation's efforts to achieve the best possible results of economic performance.

An executive meeting of the State Council, China's Cabinet, has further specified that the key role of effective investment in boosting economic recovery shall be brought into play.

The State Council has also pledged efforts to accelerate central government budgetary investments, urge local governments to expedite the use of special bonds and make good use of policy-based and development-oriented financial instruments to support infrastructure projects in several fields, including transportation, energy, logistics, agriculture and rural areas.

NBS data showed China's fixed-asset investment growth stood at 5.7 percent year-on-year in the first seven months of the year, led by infrastructure investment growth of 7.4 percent and manufacturing investment growth of 9.9 percent.

Zhu Haibin, JPMorgan's chief China economist, said the country's fixed-asset investment may grow by around 6 percent year-on-year in 2022 as a key driving force of China's economic growth, which, he added, is expected to come in at 3.2 percent for the whole year and 3.8 percent in the second half.

As a strong foothold for growth stabilization, China's infrastructure investment is likely to register high single-digit growth of between 8 percent and 10 percent year-on-year in 2022, Zhu said, a notable acceleration from 0.4 percent last year.

Manufacturing investment may also sustain a strong expansion of about 10 percent this year, which will combine with buoyed growth in infrastructure investment to offset weak real estate development investment that might register full-year negative growth.

Meanwhile, China's consumption growth is expected to gradually recover in the second half, thanks to reviving services sector activity amid better containment of COVID-19 and policy measures to boost consumer spending, said Hu Yifan, head of macroeconomics for Asia-Pacific at UBS Global Wealth Management.

Local governments across China have recently accelerated measures to boost consumption. A growing number of cities, including Beijing, Shanghai and Shenzhen, Guangdong province, have unveiled shopping events or offered coupons to boost consumption in sectors like catering and tourism.

Experts said the stimulus measures rolled out by China so far are moderate in strength, marked by emphasis on economic restructuring that will help consolidate the basis for longer-term growth and high-quality development.

Notably, high-tech sectors and green industries have acted as an emerging driving force for growth. During the January-July period, the added value of high-tech manufacturing increased by 9 percent year-on-year, higher than the 3.5 percent of total industrial output. In July, the production of new energy vehicles and solar cells surged by 112.7 percent and 33.9 percent year-on-year, respectively, according to the NBS.