China’s top leaders have pledged to accelerate fiscal spending and adopt incremental policies to boost economic growth in the year’s second half. This comes after the second quarter brought a worse-than-expected slowdown, with economic growth of 4.3% being the slowest in more than three years.
Economic Challenges
The second-quarter economic growth missed the lower end of a full-year target of 4.5% to 5.0%. China’s top decision-making body, the Politburo, acknowledged difficulties and challenges facing the economy at its meeting, according to the official Xinhua news agency.
Beijing’s appetite for stimulus to spur the economy remains limited as it tries to curb industrial overcapacity feeding underlying deflationary pressure, while also pressuring indebted local governments to keep spending within their means. The Politburo signalled it would continue to comprehensively rectify ‘involution’ competition, using a term that describes price wars among manufacturers fighting for market share at the expense of profits.
Many economists believe that accelerating already-budgeted national infrastructure projects can stabilise growth in coming months without widening the fiscal deficit. China must accelerate the pace of fiscal expenditure, the meeting said, a summary of the discussion showed.
Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.
