In the first half of this year, the entire Chinese nation coordinated the promotion of pandemic prevention and control and economic and social development. The pandemic situation continues to improve, and the resumption of work and production accelerates. China’s economic growth recorded 3.2% in the second quarter, and the main highlights are as follows: First, the main economic indicators have rebounded, and the market expects an overall improvement. In the second quarter, the value-added of industrial enterprises above designated size and value-added of the service industry both changed from negative to positive. The Purchasing Managers’ Index (PMI) has risen steadily and been above the threshold for four consecutive months. Liquidity is generally reasonable and abundant, and confidence in the capital market has increased. Second, agriculture sector witnesses a robust growth and grain output has hit a record high. The recovery of industrial production is evident, and the industrial physical quantity index continues to rise. Third, the decline in the service industry has narrowed, and market sales have gradually recovered. Fourth, investment is rapidly recovering and new momentum continues to increase. Key investment projects have accelerated, high-tech and social investment fields have developed well, and the related products such as new infrastructure have grown rapidly. In 1H, retail sales of commodities online increased by 14.3% y-o-y, and the total volume of the postal industry increased by 22.5% y-o-y. Fifth, foreign trade and investment have stabilized, and the international balance of payments basically balanced. The decline in total exports of goods was significantly smaller than that in the first quarter; the surplus in exports of goods fell by 0.5% y-o-y. The deficit in service trade decreased. Foreign reserves remained stable, and the RMB exchange rate appreciated slightly. Sixth, the national surveyed urban unemployment rate was 5.7% in June, a decline for two consecutive months; the average weekly working hours of employees in enterprises increased. The market is generally stable. In 1H, the growth rate of consumer price index (CPI) dropped by 1.1% from the first quarter. In June, the CPI rose by 2.5% y-o-y, and the industrial producer price index (PPI) turned from a 0.4% drop in the previous month to a 0.4% increase. Seventh, outstanding results have been achieved in the fight against poverty. As of June 30, 28.309 million poor laborers from 25 provinces had been working as migrant workers. Full coverage social security system continues to be strengthened. The ecological environment continues to improve. Eighth, the coordinated development of the Beijing-Tianjin-Hebei region, the construction of the Guangdong-HongKong-Macao Greater Bay Area, and the integrated development of the Yangtze River Delta are progressing steadily. The master plan for the Hainan free trade port was officially released.
In order to further overcome the adverse effects of the pandemic, and promote the full return of the economy to normal growth, China has made solid decisions and introduced a series of response measures: First, implement macroeconomic control. Reduction of 2.5 trillion yuan in taxes and fees was newly introduced. A special transfer payment mechanism was established through which 2 trillion Yuan of fiscal deficit and special anti-pandemic treasury bonds will be distributed. Second, continue to roll out policies to help companies address difficulties. Make an appropriate interest concession of 1.5 trillion yuan to various enterprises throughout the year. Speed up the implementation of the policy to cut fees. Strictly investigate and prosecute the tax collection malpractices, and reduce unreasonable burdens on market entities in the name of clearing and repayment. Further clean up and regulate the charges of industry associations and chambers of commerce. Third, actively expand effective investment. Issue 1 trillion yuan of special treasury bonds. Speed up the issuance and use of local government special bonds. Focus on supporting the construction of the major infrastructure and urbanization projects, and make arrangements for and accelerate the progress of the construction of 150 major water conservancy projects this year and in the follow-up period. Fourth, stabilize employment and protect people’s livelihood. Focus on key groups such as college graduates and migrant workers, strengthen assistance to enterprises to stabilize employment and offer basic assistance in securing employment, and support flexible employment through multiple channels. Make every effort to control floods and enhance work safety. Resolutely win the battle against poverty. Fifth, deepen the reform process to stimulate market vitality. Strengthen services for market players and provide convenience for employment and entrepreneurship. Sixth, stabilize foreign trade and investment. Exploit the potential of customs clearance reform and optimize services for foreign trade enterprises. Improve export tax rebate methods and speed up the progress of tax rebates. Alleviate the liquidity difficulties of foreign trade enterprises and help them expand their business.
Being the world’s second largest economy and the largest consumption market, the positive growth of China’s economy serves to stabilize and inject vitality into the world economic recovery.
(The writer is consul general of China to Karachi)