(Yicai Global) Sept. 2 -- China's economy is under pressure, but the country is entirely capable of achieving this year's targeted expansion of 6 percent to 6.5 percent in gross domestic product, according to a leading government economist.
The state has taken steps to stabilize infrastructure investment and recently revealed a series of measures to spur consumption, so the slowdown in investment growth will ease, the Shanghai Securities News reported, quoting Wang Yiming, deputy director of the State Council's Development Research Center.
China can further stabilize demand, Wang said at the 2019 China Zhengzhou International Futures Forum. But trade is still under pressure, and will likely see no growth throughout the year, with exports possibly even contracting, he added.
The International Monetary Fund trimmed its global economic forecast in April, lowering its projections for almost all major economies. Among them, the United States has experienced a major downturn. The outlook for the eurozone remains sluggish, while some emerging markets are underperforming. Globally, safe-haven asset prices are rising, Wang said.
Major economies are also adjusting their monetary policies. The US Federal Reserve cut interest rates on July 31 for the first time in a decade after ending its quantitative easing policy two months earlier. Other developed nations and emerging markets have also cut interest rates. Of particular concern is the reversal in the US's 10-year bond and short-term treasury yields, which raises questions about the American economy, Wang added.
Although China's economy is facing profound internal and external changes, some things remain unchanged and this enhances confidence, Wang said. First of all, the nation's economic fundamentals have not changed. The people's strong desire to pursue a better life is unaltered. China is still the world's largest potential market, while middle class has surpassed that of the US and continues to expand.
Second, China is still the country with the most complete industrial chain. It is still the country with the fastest infrastructure construction in the world. And fifth-generation mobile networks will be the new generation of communications, accelerating the flow of goods and materials.
The Consumer Price Index is picking up, but China can safely target it at about 3 percent for the whole year. The price of manufacturing product will stop falling and stabilize, Wang said.