Xi: Greater access to private capital is key

The Chinese leadership pledged to stabilize economic growth while promoting structural reform in the second half of the year, stressing prevention of systemic risks.

At a meeting on Thursday of the Political Bureau of the Communist Party of China Central Committee, President Xi Jinping called for ensuring certain public spending and providing greater access to private capital in government-led investment programs.

The meeting highlighted providing a favorable regulatory environment for new business ventures based on improvements in structural reform.

Fiscal policy should remain proactive to continually ease burdens on enterprises. The prudent monetary policy should provide proper liquidity to the real economy, said a statement released after the meeting.

"Economic growth in the first six months has achieved its goal, as the main indicators have shown rebound. But the downward pressure is still considerable, and some enterprises have encountered difficulties," it said.

The meeting also called for pushing ahead State-owned enterprises, taxation and financial reforms.

Analysts said that the key task for the government is to maintain the GDP growth at "about 7 percent" in the second half as well as to provide enough jobs to at least avoid social unrest, which is the "bottom line" that policymakers can tolerate.

In the first half, China's economy saw 7 percent GDP growth, in line with expectations. Inflation remained at a low 1.3 percent year-on-year. Consumer consumption contributed about 60 percent of growth.

Wang Tao, UBS AG's chief economist in China, said: "Spending will increase quickly on government-initiated infrastructure and development projects in the second half to stimulate investment, which will be the main effective growth stabilization measure."

Lian Ping, chief economist in China at the Bank of Communications, said that the earlier policy issued to stabilize growth took effect in the second quarter, and more positive signs will be seen, especially in the manufacturing sector.

Chenjia1@chinadaily.com.cn