China growth stabalising at slow pace, says govt official

Government efforts to reverse China’s economic slump are taking effect and growth is “stabilizing at a slow pace,” the head of the country’s planning agency said Wednesday.

The statement by the minister in charge of the National Development and Reform Commission came amid a flurry of mixed signals that show some activity picking up but export orders and corporate profits weakening.

“The government’s policies and measures have been effective and the country’s economic growth is stabilizing at a slow pace,” the official Xinhua News Agency paraphrased Zhang Ping as saying in a meeting with legislators.

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The report gave no other details of Zhang’s report or a forecast of when economic growth that fell to a three-year low of 7.6 percent in the second quarter might rebound.

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Beijing cut interest rates twice in June and is trying to pump up the economy by approving a wave of new industrial investments. Authorities have resisted calls for more aggressive stimulus after huge spending in response to the 2008 crisis fueled inflation and a wasteful building boom.

Premier Wen Jiabao has expressed confidence China can meet its economic targets but warned last month the job situation will become “more complex and severe.” The Communist Party’s official growth target this year is 7.5 percent.

Forecasters expect growth to rebound late this year or in early 2013 but say a recovery will be too weak to drive global growth without improvement in the United States and Europe.

Unusually weak data from July and August have fed worries China’s rebound might be delayed still further.

Profits at industrial companies in auto manufacturing, steel production and other fields declined in July for a fourth month, data showed this week. That might hurt investment, a pillar of Beijing’s recovery plan.

July export growth fell to 1 percent, well below forecasts, adding to pain for manufacturers that have been battered by weak global demand. Thousands of small companies have been driven out of business, raising the threat of job losses and unrest as the Communist Party prepares to hand over power to younger leaders.

Wen, the premier, called last weekend for efforts to stabilize trade growth. He said the current quarter is a “critical period” for China to meet its annual trade targets.

Zhang, the planning official, also said government curbs on the housing market have “effectively suppressed” speculative activity blamed for soaring prices, according to Xinhua. It noted that prices for new residential buildings declined in July in 58 out of 70 major Chinese cities.

AP