Fine-tuning will consider varying needs of areas, sectors, NDRC official promises

China's top economic planner expressed confidence in achieving the 7.5 percent gross domestic product growth target this year through hard work after the government decided to adopt further measures to stabilize market expectations and release enterprises' vitality.

National Development and Reform Commission Minister Xu Shaoshi showed his determination on Wednesday in an interview with Xinhuanet.com, one day after President Xi Jinping vowed to guarantee the year's target by further clarifying the government's policy stance for the second half of the year and confirming the direction of ongoing structural reforms.

Xu stressed the need to maintain "moderately abundant" monetary liquidity and efficiently make use of credit and fiscal capital to support the industrial economy.

"Policy fine-tuning will be likely at the right time," he said.

"Diversified adjustments that take into consideration the different situations of regions, industries and enterprises will be taken in the second half" to strengthen enterprises' confidence by maintaining growth within a reasonable range and preventing risks, Xu said.

For the next step of reform, the minister also pledged the nation would launch demonstration projects for private funds to invest in infrastructure construction and public services, as well as eliminate unreasonable fees in banking services.

A statement from the Political Bureau of the Communist Party of China's Central Committee laid out its main strategies for the coming quarters on Tuesday. They include increasing public consultation, maintaining rational investment growth and supporting small and medium-sized enterprises.

It said economic growth in the first six months of the year was "stable" despite extremely complicated domestic and international conditions.

The country's economy experienced 7.6 percent year-on-year GDP growth in the first half of the year. The second quarter growth slowed to 7.5 percent from 7.7 percent in the first quarter.

Lian Ping, chief economist at the Bank of Communications, said in the second half of 2013, it is unlikely to see a substantial economic rebound although the reforms may accelerate.

"Industrial enterprises may see better conditions in the second half if the investment in infrastructure construction and public services can support stable economic expectations while benefiting small-scale businesses," said Lian.

He said the problem of excessive production capacity is still serious and that it is hard to boost domestic consumption or promote exports over a short period.

Yao Wei, chief economist in China with Societe Generale, a French financial group, said the Political Bureau's meeting indicated little change from the balanced stance that has been communicated to the market in the past few weeks.

The top leadership signaled only modest policy easing, preferably in the form of economic restructuring and reform, Yao said.

"Excess credit growth will still be contained and there will be no large-scale fiscal stimulus. One implication is that capacity consolidation may speed up so that resources and capital can be freed up from inefficient sectors."

According to a survey released on Wednesday by Netease Annual Economist Conference, 71.25 percent of China's economists are "cautiously optimistic" about the new leadership's reform determination, while 23.75 percent said they are "optimistic".

Half the number of economists surveyed said the largest problem for China's economy is "overcapacity", while the second largest concern, for about 24 percent of the respondents, is the existence of a property bubble. Nearly 65 percent said "average household income" should be the major indicator to measure realization of the "Chinese dream".

Yu Yongding, a former member of the Monetary Policy Committee of the People's Bank of China, warned at the conference that local government debt is an issue that policymakers should be "highly alert" to because the government actually "has no idea" of how large the debt exactly is.

Xu Shanda, former deputy director of the State Administration of Taxation, said at the conference he was glad to see the Political Bureau meeting held on Tuesday emphasize the key areas for reforms, but it did not mention "curbing the property market" as it always had done before.

"This is a very important message. Instead of restricting home purchasing, the meeting mentioned 'unleashing' demand, which showed a new and different approach," Xu said.

Contact the writers at chenjia1@chinadaily.com.cn and zhengyangpeng@chinadaily.com.cn

(China Daily USA 08/01/2013 page13)