China's economy posted 7 percent growth year on year in the second quarter of 2015, Chinese Vice Finance Minister Zhu Guangyao told Xinhua in a recent interview in London, emphasizing the data was realistic and serious.
Analyzing the data released by China's National Bureau of Statistics (NBS), Zhu pointed out that China's economic growth was 7.4 percent last year, and the growth rate remained above 9 percent in the past for a long time. Therefore, the 7-percent growth rate shows China's economy is facing pressures, he said.
On the international side, China is in a severe external economic environment, including a divided trend of monetary policies in different developed economies and geopolitical risks. Zhu said the complex external environment has a negative impact on China's economy.
On the domestic side, China has to deal with the slowdown in economic growth, making it difficult to make structural adjustments, and absorb the effects of previous economic stimulus policies.
Besides, the 7-percent growth rate also reflects China's adjustment measures are being gradually put in place, Zhu stressed. The most important thing is to adhere to the proactive fiscal policy and a prudent monetary policy.
Zhu noted that China's report on the work of the government showed four key factors that constitute proactive fiscal policy:
Firstly, the government budget deficit for 2015 will increase modestly, which means the deficit to gross domestic product (GDP) ratio will rise from last year's 2.1 percent to this year's 2.3 percent.
Secondly, the government will continue to make structural tax reductions and cut fees across the board so as to further lighten the burden on enterprises, particularly small and micro businesses.
Thirdly, the government will improve the mix of budgetary spending, redouble its efforts to put government funds on hand into use, and strengthen the effectiveness of government spending.
Fourthly, the supply of public goods and services will increase.
As to the prudent monetary policy, Zhu indicated that the key is to stabilize renminbi's (RMB) value, control inflation, and support the real economy. The RMB exchange rate has reached a balanced level, and China's balance of payments is in an appropriate range. "We have made significant progress," he said.
Zhu told Xinhua that in the first half of this year, China's consumer price index (CPI) edged up 1.3 percent y-o-y, fixed-asset investment grew 11.4 percent y-o-y, retail sales of consumer goods rose 10.4 percent y-o-y, urban employment increased by 7.18 million, and the contribution of consumption toward economic growth rose to 60 percent.
"This is indeed very healthy data," said Zhu.
Furthermore, the value added of the service sector increased to 49.5 percent of the GDP in the first half of this year, suggesting China is making progress in economic structural adjustment.
Zhu has full faith in China's economy. "With strong macroeconomic policies, we are confident to achieve 7-percent growth target this year and keep the potential growth between 7-8 percent during the 13th five-year plan," noted Zhu.
According to the latest forecast from the International Monetary Fund (IMF), global economic growth is projected at 3.3 percent in 2015. China's contribution to the global economy is expected to reach 28.5 percent this year, said Zhu.
