Recently, several positive signs have emerged which seem to indicate that China's economy is on a path toward a recovery in the third quarter. For example, liquidity in the country's interbank market as well as the rate of investment are clearly showing signals of expanding. Meanwhile, upticks in home property sales volume and automobile production all indicate rising domestic consumption.
At the same time, many in the market expect Beijing to roll out a raft of stimulus policies in the coming months in order to stave off any further drops in domestic economic growth.
China's economy may well recover in the second half if the country can achieve a 10 percent growth rate in its exports while also expanding domestic consumer spending.
At the same time, the central government should also ease its monetary policies by reducing banks' reserve requirement ratios.
The author is Zhang Yongjun, deputy director of Research Department at the China Center for International Economic Exchanges.
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