August data augurs well for economic recovery

China's key economic indicators improved in August in a new sign of notable recovery after the government rolled out stimulus policies to support growth amid downward pressure.

Growth in China's value-added industrial output and retail sales accelerated to 4.2 percent and 5.4 percent, respectively, in August from a year earlier, said the National Bureau of Statistics, after rises of 3.8 percent and 2.7 percent in July.

Experts said the figures showcase the strong resiliency of the economy and China's economic recovery will continue to gather pace in the following months, with COVID-19's impact gradually easing and policy measures taking effect.

Warning of a complicated international environment, shrinking demand, supply shocks and weakening expectations, they said the foundation for recovery is still not solid, and expect further fiscal and monetary easing to stimulate the economy, such as proactive infrastructure spending and supportive credit to manufacturing and real estate.

Fu Linghui, spokesman for the NBS, said at a news conference on Friday in Beijing that the improvement in key indicators shows that China's economy has strong resilience, ample potential and wide room for maneuver.

Despite facing difficulties and challenges, he said the fundamentals of China's long-term sound economic growth and the necessary production factors for quality development remain unchanged.

Looking ahead, Fu said China's economy will likely rebound and operate within a reasonable range with a series of stimulus packages and follow-up measures taking effect.

Facing a more complicated and grim external environment, China needs to make more efforts to strengthen the foundation for recovery, the People's Bank of China, the nation's central bank, said in a statement on Friday.

The PBOC cited concerns over spillover effects of the slowing global economy, high inflation around the world, continued geopolitical risks and rapid monetary tightening in major advanced economies, saying China is at a critical juncture in its economic rebound.

According to the statement, China has ample room for monetary policy and abundant policy tools, and it has favorable conditions to keep economic performance within a reasonable range.

NBS data showed that fixed-asset investment increased by 5.8 percent year-on-year in the January-August period, compared with a 5.7 percent rise in the first seven months.

Notably, infrastructure and manufacturing investment jumped 8.3 percent and 10 percent, respectively, over the January-July period.

Zhou Maohua, an analyst at China Everbright Bank, said the better-than-expected industrial production, consumption and investment point to an accelerated economic recovery.

Zhou said he expects to see further improvements in these key indicators in the following month with a gradual recovery in demand, effective government measures to stabilize growth and gradual normalization of economic activity.

Meanwhile, Wen Bin, chief economist at China Minsheng Bank, noted the foundation for recovery is still not solid, saying more efforts should be made to implement existing stimulus measures to stabilize the economy.

Citing China's moderate and stable inflation level, Yang Haiping, a researcher at the Central University of Finance and Economics' Institute of Securities and Futures, said there still remains room for further reductions in reserve requirement ratios and interest rates.