BEIJING (Reuters) – China’s top economic planner pledged on Tuesday that it would roll out policies to “restore and expand” consumption without delay as consumers’ purchasing power remained weak, suggesting an urgency to revive domestic demand.
The world’s second-largest economy grew at a frail pace in the second quarter, official data showed on Monday. Gross domestic product expanded 6.3% in the second quarter from a year earlier, well below the forecast for a growth of 7.3%.
At a monthly press conference by the National Development and Reform Commission (NDRC) on Tuesday, Jin Xiandong, an NDRC official, said persistent economic recovery faces difficulties and challenges of “insufficient demand, weak momentum and weak confidence”.
Consumers’ purchasing power and consumption expectations are relatively weak while infrastructure and consumption environment need to be improved, Jin said.
Jin said the NDRC would “promptly formulate and roll out policies to restore and expand consumption”.
“Focusing on stabilising the bulk commodity consumption, improving automobile and electronics consumption as well as optimising consumption environment, we will introduce a batch of practical and effective policies and improve their implementation as soon as possible,” he added.
Retail sales, a gauge of consumption, grew 3.1% in June, slowing sharply from a 12.7% jump in May. Analysts had expected a growth of 3.2%.
Jin said the NDRC would also aim to stabilise jobs, in particular help with youth employment.
Youth jobless rate climbed to 21.3% in June from 20.8% in May, a new record high, as graduates scrambled for limited offers during the job hunting season.
Another NDRC official, Li Hui, said the state planner would communicate with private firms in a normalised manner to learn about their operations and difficulties. The official was also speaking at NDRC’s monthly press conference.
NDRC head Zheng Shanjie has held three meetings with private firms this month, which is rare, in an attempt to improve their confidence that they can support the post-pandemic recovery.
Indicating weak private business confidence, private fixed-asset investment shrank 0.2% in the first six months, versus an 8.1% growth in investment by state entities.
China’s commerce ministry on Tuesday announced a series of measures to boost use of consumer goods and services.
($1 = 7.1690 Chinese yuan)
(Reporting by Ellen Zhang and Kevin Yao; Editing by Himani Sarkar)
