China’s economy builds recovery momentum, shows signs of improvement

China’s economic indicators were higher than predicted in August, showing that the country’s pro-growth measures are successful and reinforcing the country’s prospects of meeting its full-year economic growth objective.

Positive economic indicators are piling up in China, and skeptics will be disappointed once more, according to Cong Liang, deputy director of the National Development and Reform Commission, at a news conference.

With major economic indices showing indications of improvement, China has capitalized on the good trend by implementing a slew of macroeconomic reforms across the board.

On the budgetary front, China has increased the issue and usage of special-purpose local government bonds. On the monetary front, the country’s central bank has adjusted policy rates and reduced the financial-institution reserve requirement ratio twice this year.

“At a watershed moment for the Chinese economy, the central bank made the appropriate choices,” said Dong Ximiao, head researcher at Merchants Union Consumer Finance Company Limited.

The impact of the full policy package may be seen in the August figures. According to figures from the National Bureau of Statistics, China’s value-added industrial output climbed 4.5 percent year on year in August, up from 3.7 percent in July, while retail sales of consumer products increased 4.6 percent after a three-month downturn.

The People’s Bank of China will continue to use a variety of policy instruments to sustain liquidity at a fair and sufficient level while guiding real-economy financing costs lower, according to “PBOC” official Zou Lan.

“The property industry, while still dragging on the Chinese economy, showed hopeful indicators in numerous regional markets in August,” according to Cong.

China recently simplified the criteria for identifying first-time house purchasers in order to allow more individuals to benefit from preferential policies, as well as lowering the interest rates on current first-home mortgages.

“The flurry of measures appears to have sparked a comeback in second-hand house sales, although the response in the new-home market has been delayed,” said Zhong Zhengsheng, chief economist at Pingan Securities.

According to Wang Qing, an analyst at Golden Credit Rating, local governments are anticipated to step up measures to stimulate their housing markets, including relaxing house purchase limitations and providing home purchase incentives.