Six things to watch in China's economy

BEIJING -- The Chinese economy recorded a general upward trajectory in the first half of this year, with fluctuations also being spotted. As optimism and pessimism both arose, how does one correctly judge the economic trend?

The following analysis in six aspects, from demand to employment, offers a glimpse into the performance and prospects of the world's second-largest economy.

Economic recovery

With a rosy start and a stable second quarter, the macro economy experienced an unusual recovery curve.

Above all, China's growth is praiseworthy against a slowing global economy backdrop. In the first six months, China secured a 5.5-percent GDP expansion -- quicker than 2022 and this year's first quarter -- driven by stronger consumption and steadily improving services.

Secondly, economic vibrancy did soften in the April-June period, with weakening indicators from exports to industrial profits. However, it is normal to see some volatility during the post-COVID-19 recovery phases, said Liu Yuanchun, president of the Shanghai University of Finance and Economics.

Besides, despite headwinds at home and abroad this year, China's economic growth had higher quality, with continued transformation and upgrades.

For instance, China's 20 millionth new energy vehicle rolled off the production line early this month in the southern Chinese city of Guangzhou, marking a milestone for the country's green drive. China's exports of solar batteries, lithium-ion batteries, and electric vehicles soared amid sluggish global trade. The equipment manufacturing and high-tech industries also registered robust growth.

Chinese authorities have recognized the difficulties and pledged more efforts to bolster the economy. Pressures and challenges will not change the sound long-term economic trend, said Meng Wei, spokesperson for the National Development and Reform Commission.

Domestic demand

Gauged by short-term indicators, the recovery of China's domestic demand in recent months slowed down from the first quarter as insufficient market demand and tepid endogenous impetus remained a drag on growth.

But packed subway trains, long queues at restaurants, and humming machines in factories across the country are adding strength to an economic upturn.

Liu Guoqiang, deputy governor of the People's Bank of China, stressed that it takes time for consumption to return to normal.

It has only been about half a year since China adjusted its COVID-19 response, and positive signs have emerged already in areas including economic circulation, residents' incomes, and consumption, Liu said.

In the first half, infrastructure and high-tech investment maintained robust increases, and private investment, excluding those in property development, saw a 9.4-percent rapid expansion from a year ago.

Further expanding domestic demand remains key to sustaining recovery. To that end, China has rolled out various measures to boost consumer spending on new-energy vehicles, household items, and other areas and encourage private capital to partake in the major national projects as outlined in the 14th Five-Year Plan (2021-2025).

With its super-sized market and great domestic demand potential, China possesses strong economic resilience and abundant room for maneuvering. What the country needs in the course of recovery is firm confidence and patience.

"Consumer spending will play a bigger role in shoring growth as supportive policies take further effect. Investment in infrastructure and manufacturing are resilient and will also help expand domestic demand," said Fu Linghui, a National Bureau of Statistics spokesperson.