A worker does welding at a factory in Qingdao, Shandong Province. National Bureau of Statistics data show that the GDP totaled nearly 16 trillion yuan ($2.4 trillion) in the first quarter of 2016, an increase of 6.7 percent from a year earlier.

Academics suggested policymakers give equal consideration to stabilization and risk prevention after a meeting on economic work held by the Political Bureau of the CPC Central Committee on April 29.

According to a statement issued after the meeting, the economy is performing at an acceptable level, but the nation faces relatively high downward pressure.

National Bureau of Statistics data show that the GDP totaled nearly 16 trillion yuan ($2.4 trillion) in the first quarter, an increase of 6.7 percent from a year earlier. The value added by large industrial enterprises was up 5.8 percent year-on-year. Fixed-asset investment, excluding agriculture, totaled 8.6 trillion yuan, an increase of 10.7 percent in nominal terms and 13.8 percent in real terms over the same period last year.
 

Experts said that developments in the economy, such as new bank loans, growth of the money supply and destocking of the real estate sector, have been crucial to growth in the first quarter of this year.
Liu Xiahui, director of the Department of Economic Growth Theory at the Institute of Economics under the Chinese Academy of Social Sciences, said credit, especially total social financing, has grown at record rates.
 

“The growth in the first quarter, which is within the expected range [of 6.5 to 7 percent], is mainly driven by the increase of loans, particularly the revival of some regional property markets and investment markets,” Liu Xiahui said.
 

The economic data of the first quarter, in addition to the growth conditions of last year, responded to the widespread pessimism over China to some extent.
 

Liu Yuanchun, executive director of the National Academy of Development and Strategy at Renmin University of China, said that the world economy would have been unimaginably tough in 2015 had it not been for China’s 6.9 percent growth. The global economy was especially sluggish last year and still feeling the effects of the 2008 financial turmoil, Liu said, adding that China’s solid start in 2016 has made it a core engine for growth in the world economy and emerging economies.
 

Though a number of indicators show promising signs, downward pressure is still evident, said Liu Xiahui, noting that a short-term credit stimulus is not a long-term solution. Constant readjustment is needed to push forward reform, he said.

The meeting also rolled out specific measures on the stock market, yuan exchange rates, destocking of the housing inventory, employment, and reform of State-owned enterprises.

Scholars said the series of measures will be conducive to stabilizing development expectations and boosting market confidence.
 

Regarding macroeconomic policy, Li Zuojun, a research fellow at the Development Research Center of the State Council, pointed to the need to strike a balance in two aspects.

For one, macroeconomic control and supply-side reform should be balanced. Equal attention should be paid to exploring new areas of growth to ensure long-term, healthy and sustainable development and to avoiding short-term economic stalling and systemic risks. Second, there must be equilibrium between monetary and fiscal policy, which should both be flexible and adaptable to actual needs and conditions, Li said.
 

Cutting taxes and increasing spending on social security will be the primary goals of active fiscal policy. At the same time, policymakers will continue to lay the groundwork for a macroeconomic environment that favors restructuring and a prudent monetary policy, said Zhu Baoliang, director of the Department for Economic Forecast at the State Information Center.
 

Meanwhile, efforts will be made to eliminate zombie enterprises and address the overcapacity of the housing industry while forming a unified, open and competitive market system, encouraging entrepreneurship and opening China even further, Zhu said.

Huo Wenqi is a reporter at the Chinese Social Sciences Today.