China's Economy Performs Well as Restocking Cycle Comes to a Close
Zhu Yanran
DATE:  Sep 05 2017
/ SOURCE:  Yicai
China's Economy Performs Well as Restocking Cycle Comes to a Close China's Economy Performs Well as Restocking Cycle Comes to a Close

(Yicai Global) Sept. 5 -- China's economy registered stable performance with good momentum in July after putting up better-than-expected numbers in the second quarter.

The growth of main indexes kept pace from the first half and outstripped the previous year. Restocking was a key contributor to economic growth in the first half.

The restocking cycle has drawn to a close, and the economy requires new catalysts for future development, said Liu Zhe, director of the Wanbo Research Institute's New Supply Economics Research Center. Industrial added value in July rose 6.4 percent annually and fell 1.2 percent from June, Liu said. Mining and manufacturing industry growth slowed as the restocking cycle closed, and the short-term role of the traditional manufacturing industry as a driver weakened.

The falling inventory signifies the end of an active restocking cycle, while the declining demands indicates that enterprises will enter the destocking stage in the future, Liu said.

The government should take the favorable opportunity to push financial deleverage and economic structural adjustments in the second half, while encouraging private investment, Steven Zhang, chief economist at Morgan Stanley Huaxin Securities Co., told Yicai Global.

"When the government creates favorable conditions for innovation and development and the market plays a decisive role in resource allocation, the microeconomy will naturally restructure production factors by revolutionizing technology and business modes and creating new supply and new demand," Liu said.

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Keywords:   Economic Data,Macroeconomic Reform