China may report positive economic growth in the second quarter after a sharp contraction in the first quarter, the China Daily reported, citing Chinese economists.
China’s policies will remain supportive for the rest of the year to help the economy advance steadily out of the Covid-19 pandemic. China is scheduled to release a set of key economic data this week on second-quarter GDP, trade, investment, industrial production and retail sales.
While the government has abandoned setting a specific growth target for this year, much attention remains focused on the second-quarter GDP growth rate as it will shed light on the outlook for the world’s second-largest economy and Beijing’s future policy direction.
Most economists expect China’s GDP growth rate to turn positive in the second quarter, with some projecting growth as high as 3%, a sharp rebound from the 6.8% contraction in the previous quarter.
The optimistic views reinforced expectations that China’s economic recovery will continue in the coming quarters, driven by further improvement of domestic demand and investment along with continuous policy support in key areas including employment and corporate operations.
Some economists forecast China’s GDP growth could rebound to about 6% in the second half of the year and the country may achieve full-year growth of around 2% to 3%.
“Economic recovery should continue, following the recent rebound in the second quarter. Domestic consumption will likely improve further with continued policy support and the normalization of economic activity,” Wang Tao, chief China economist at Swiss bank UBS, told the China Daily.
“We expect policies to remain supportive while the continued recovery lately has reduced incentives for greater stimulus in the short term,” Wang said.
Wang Jun, the chief economist at Zhongyuan Bank, said China’s fiscal policy support needs to intensify in the second half of the year to ensure sufficient funding for major projects and the protection of people’s basic livelihoods.
Meanwhile, monetary policy will be more targeted to help lower funding costs for smaller businesses, as there have been signs of marginal policy fine-tuning by the central bank, he added.
Capital market regulations
China’s financial regulators said they will have “zero tolerance” for any illegal activities in the country’s capital market such as fraudulent securities issuance and financial fraud.
China should take multiple measures to enhance the enforcement of laws and regulations in the securities sector to maintain a healthy and stable capital market environment, according to a Saturday meeting of the financial stability and development committee under the State Council.
Presided over by Vice-Premier Liu He, who is also a member of the Political Bureau of the Communist Party of China (CPC) Central Committee and head of the financial stability and development committee, the meeting pledged severe punishment for major capital market violations.
A number of financial fraud cases have occurred and there was a call for institutional improvements to curb such activities, the meeting said.
The China Securities Regulatory Commission will work together with other relevant departments to set up a team specifically aimed at cracking down on illegal activities in the capital market, the meeting said.
China’s central bank on Monday pumped cash into the banking system via reverse repos for the first time in July to maintain liquidity.
With no reverse repos maturing Monday, the People’s Bank of China injected a total of 50 billion yuan (US$7.15 billion) into the market through seven-day reverse repos at an interest rate of 2.2%, according to a statement on the website of the central bank.
The move is intended to maintain reasonable and sufficient liquidity in the banking system, the central bank said.
A reverse repo is a process in which the central bank purchases securities from commercial banks through bidding, with an agreement to sell them back in the future.
A total of 266 overseas-invested telecommunications enterprises had been approved by authorities by the end of June, according to the China Academy of Information and Communications Technology.
In terms of overseas capital sources, about two thirds came from Hong Kong, followed by the United States and Singapore, with the three accounting for 79% of the total. Among the 266 enterprises, 78 are wholly owned by overseas investors, accounting for 29%.
The enterprises provide information services, online data processing and transaction processing and domestic call center services, among others, the report said.
China’s newly-listed workforce operational solution provider Quhuo Limited would focus on operating results and sustainable development of its own businesses rather than negative external developments, said Leslie Yu, head of the Nasdaq-listed company.
“We would concentrate on having sound businesses and finance so as to realize healthier development,” said Leslie Yu, chairman and CEO of Quhuo, at an online meeting with media representatives on Friday.
In response to inquiries about risks brought by a US bill known as Holding Foreign Companies Accountable Act, Yu told Xinhua that he is very confident about the accuracy of Quhuo’s financial reports.
The story was written by Xu Jiangshan and Liu Licong and first published at ATimesCN.com. It was translated by Nadeem Xu.