(Yicai) Nov. 6 -- China’s economy is on track to reach its 5 percent growth target this year as confidence holds steady and policy support strengthens, according to Yicai’s survey targeting chief economists.

The Yicai Chief Economists Confidence Index for November came in at 50.3, unchanged from October and remaining above the neutral 50 mark, indicating continued confidence in economic stability, based on the results of the latest survey.

Following trade consultations between China and the US in Kuala Lumpur, bilateral tensions have eased, with average US tariffs on Chinese goods falling by 10 percentage points to 31 percent, said Cai Wei, director of the KPMG China Economic Research Institute.

Cai added that this has positively influenced fourth-quarter trade and business sentiment. On the policy front, the government recently introduced CNY500 billion (USD70.2 billion) in new policy-based financial instruments and another CNY500 billion in local government bond quotas. In addition, government bond trading operations were resumed to inject liquidity into the market.

With the joint support of fiscal and monetary policies, domestic demand is expected to recover in the fourth quarter, making it likely that the annual growth target of around 5 percent will be achieved, Cai said.

However, Lian Ping, president of the Guangkai Chief Industry Research Institute, noted that China’s external environment remains challenging.

Although tariffs imposed under the Trump administration have been reduced, uncertainty persists, Lian said. Domestic consumption also faces constraints due to limited income growth among residents. He added that investment must play a greater role in stabilizing growth, and with the US Federal Reserve’s 25 basis point rate cut in October, there is now room for further monetary easing in China.

Economists expect the recent downward trend in prices to ease. The average forecast for October’s consumer price index is a 0.1 percent year-on-year decline, compared with a 0.3 percent fall in September, while the producer price index is expected to drop 2.2 percent, versus a 2.3 percent decrease the previous month.

Respondents forecast a 5.7 percent increase in October’s industrial added value, down from 6.5 percent in September. Retail sales of consumer goods are projected to grow 2.7 percent, compared with 3 percent a month earlier. Fixed-asset investment for the first 10 months is expected to fall 0.8 percent year on year, widening from a 0.5 percent contraction in the prior period.

Export and import growth are forecast at 2.6 percent and 3.1 percent, respectively, both lower than September’s highs of 8.3 percent and 7.4 percent. The trade surplus is expected to widen to USD94.3 billion from USD90.5 billion in September. New loans and aggregate social financing are predicted to reach CNY454.9 billion (USD63.9 billion) and CNY1.3 trillion (USD182.5 billion), respectively, well below September’s official figures of CNY1.3 trillion and CNY3.5 trillion.

A total of 14 economists participated in the survey.

Editors: Dou Shicong, Emmi Laine