China mulls over economy-boosting measures to counter ‘severe situation’
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Retail sales rose far less than expected in June and were much weaker than May, suggesting efforts to kick-start consumption have fallen flat.
PHOTO: AFP
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BEIJING – China has a “plentiful” toolbox to avoid an economic slump in the second half of the year, its Commerce Minister said on July 18 as he admitted the country faced a “very severe and complex situation”.
Growth hit 5.2 per cent in the second quarter,
Retail sales rose far less than expected in June and were much weaker than in May, suggesting efforts to kick-start consumption have fallen flat.
“We are still facing a very severe and complex situation. Global changes are unstable and uncertain. Some of our policies will provide some new responses according to the times and circumstances,” Mr Wang Wentao told journalists at a news briefing.
“Our toolbox is plentiful, and we will be fully prepared.”
Asked specifically about China’s reliance on exports, Mr Wang suggested the government was preparing policies to “further stimulate the momentum of our consumption development”.
“China’s economy is improving, and the long-term fundamentals have not changed; the consumption market’s characteristics of great potential, strong resilience and vitality have not changed,” he said.
Mr Wang also namechecked Beijing-based toymaker Pop Mart, whose Labubu monster dolls have become a must-have item internationally, adorning the handbags of celebrities such as Rihanna and Dua Lipa.
“We are also promoting new forms of consumption... for example, Pop Mart, these kinds of new trends, new fashions and styles... The Labubu phenomenon has swept the world,” he added.
US decoupling impossible
Beijing is battling to shift towards a growth model propelled more by domestic demand than the traditional key drivers of infrastructure investment, manufacturing and exports. That desired transformation has become more urgent since Mr Donald Trump came to office.
The US President has imposed tolls on China and most other major trading partners, upending trade norms and endangering Beijing’s exports at a time when it needs them more than ever to stimulate economic activity.
The two superpowers have sought to de-escalate their row after reaching a framework for a deal at talks in London in June, but observers warn of lingering uncertainty.
Mr Wang said on July 18 that despite “storms and rain”, Washington remained an important trading partner.
Even though China-US trade has declined proportionally for each country, overall bilateral trade has remained stable, he said.
In a sign of progress, US tech giant Nvidia said this week that it would resume sales of its H20 artificial intelligence chips to China after Washington pledged to remove licensing restrictions that had halted exports.
China’s Commerce Ministry acknowledged the US decision in a statement on the afternoon of July 18, even as it called for Washington to “abandon its zero-sum mentality”.
“China believes that the United States should... continue to cancel a series of unreasonable economic and trade restrictive measures,” the statement read.
Nvidia chief executive Jensen Huang met Chinese leaders this week in Beijing, telling journalists on July 16 that his company was doing its best to serve the country’s vast semiconductor market.
Mr Wang on July 18 praised recent visits by Mr Huang and other US executives, noting that the solid economic and popular basis for US-China cooperation “makes artificial decoupling and severing supply chains impossible”.
Yet, an inconsistent tune has “severely impacted and disrupted normal trade cooperation between China and the United States”, he said.
Since Mr Trump’s first term, “the trend of the trade frictions provoked by the United States has had ups and downs”, he added. AFP
