Strong stimulus not necessary to spur China’s growth: state media commentary
Expansion rate of 7 per cent in first half of the year is still one of the fastest among the world's major economies, state media commentary says
China has no need for "massive stimulus measures" to keep its economy steady, the state-run People's Daily said yesterday, in an apparent effort to assuage growing concern over the country's slowing growth.
The front-page commentary came amid a sustained fall in factory activity figures and speculation that the ruling Communist Party's top leaders are holding their summer policy talks in Beidaihe , Hebei province, at which economic development is expected to be on top of their agenda.
The very volatile stock market may negatively affect business confidence
"Stability must be given a priority while no strong stimulus measures will be implemented," the article said. "Preventing risks is the bottom line."
It warned that a stimulus would result in overcapacity and loan defaults in the long term.
The commentary's publication coincided with the release of the private Caixin/Markit China Manufacturing Purchasing Managers' Index, which showed that the figure had in July dropped to 47.8 - the lowest since July 2013 - from 49.4 in June. Anything below 50 points to a contraction.
The report followed a downbeat official survey on Saturday that showed an unexpected stall in growth at manufacturing firms, reinforcing views the struggling economy needs more stimulus even as it faces fresh risks from a stock market slump.
The economy expanded 7 per cent in the second quarter of the year in what economists said was top policymakers' most difficult three months in the past decade due to declining asset investment, slowing trade growth and a stock market gyration.