Economic Watch: Half-Year Growth

A new stimulus package should be avoided and the slowest acceptable growth pace should be maintained, serving to produce economic restructuring and growth in the medium and long term.

As macroeconomic policies are kept stable, market-oriented reforms and the decentralization of government power should be further advanced to create the internal dynamic for economic growth.

First comes stabilizing investment growth and ensuring continued funding for projects in progress. While avoiding further stimulus, we should try to ensure capital for projects that have begun and avoid "investment stall" as 20-percent or higher full-year investment growth will essentially support the 7.5-percent GDP growth target.

Second, monetary policy should remain steady while liquidity should return to neutral. The yuan's pace of appreciation should not be too fast. Liquidity and money supply growth should return to a neutral stance with the broad money supply (M2) expanding 14 to 15 percent.

Third, speed up interest-rate marketization and reduce financing costs while strengthening liquidity monitoring and crisis management.

Fourth, welcome advancing market-oriented adjustment of the real estate sector, including increasing supply in first-tier or large cities and scrapping the supply-tightening policies for restoring house prices by market means.

Fifth, advance reforms to effectively resolve overcapacity. Reasonable industrial planning is necessary for dispelling overcapacity. More opportunities should be created for manufacturing transformation, especially through opening up the monopolized and regulated fields.