Beijing's top leaders pledged to continue to make stabilising growth a priority in the second half, leaving room for more policy easing as needed to stem a further downturn.
A meeting chaired by President Hu Jintao reiterated the need to put stabilising growth in a more important position, underscoring fears that weak domestic and global demand may further damp the economy. That could threaten social stability amid the Communist Party's once-in-a-decade leadership reshuffle.
'China's economic development is still facing a grim global environment, and there are still many negative factors affecting the steady operations of the economy,' a statement on the government's website and reported by Xinhua said, citing discussions at the meeting held yesterday by the Politburo, China's top decision-maker on key economic and political policies.
'Clearly, Beijing policymakers are well aware of downside risks to the country's outlook, and remain willing to step up policy easing in support of growth and employment,' HSBC economists Sun Junwei and Qu Hongbin said in a research note.
Today, China will publish its official purchasing managers' index, which measures manufacturing momentum. HSBC China Flash PMI, a preliminary indicator based on a separate survey, showed earlier this month that slower growth may have continued into the third quarter, given the index stayed below 50 for the ninth straight month, indicating a contraction. But the gauge edged up to 49.5 in July from 48.2 in June.
Expansion in the world's second-largest economy slowed to 7.6 per cent in the second quarter, the weakest quarterly performance in three years, from 8.1 per cent in the first, damped by the European debt crisis and cooling investment at home.
Yesterday's statement didn't outline any concrete new measures. But the government said it aimed to maintain stability in consumer prices, continue with an active fiscal policy and a prudent monetary policy, step up structural tax cuts, and maintain 'steady and appropriate' growth in money and credit supply.