By Zhang Liqun, Department of Macroeconomic Research of DRC

Data released by various economic sectors in the first half of 2015 indicate that China's economy is gradually picking up. The downward economic growth has initially bottomed out. Compared with the same period of last year, current economic performance is as follows: 1. Industrial growth rate shows a sustained pickup; 2. Investment growth tends toward stability; 3. Negative export increase is replaced by a positive one; and 4. Consumption maintains a steady rise. Based upon the above analyses, it is observed that in terms of either supply or demand, the deceleration of China's economic growth has displayed an initial rebound from the bottom. Economic prospects in the second half of this year would include the following aspects. First, the U.S. and European economy will gradually realize an upturn; meanwhile in China, the continuing effect of the policies aimed at stabilizing export is expected to prevail, leading hopefully to a stable export growth. Second, regarding the real estate sector, as it has become somewhat less difficult for developers to take land, the decline in real estate investment will be further checked in the future. Third, with the reduction of excess capacity and stabilized market demand, the number of orders will be increased and the operating rate of enterprises is going to match their capacity. It is predicted that capacity utilization of the manufacturing industry will make progress while ensuring stability and manufacturing investment will be rising smoothly. Accompanied by a favorable employment environment and constant income growth, future consumption is expected to continue increasing at a steady pace. Taking also into account the analysis on the demand side, it is anticipated that China's economy will maintain a steady growth in the second half of 2015, with an annual growth slightly higher than 7%.