The National Bureau of Statistics reported on July 17 that the Chinese economy grew by 6.9 percent in the first half of this year. Economic growth has remained between 6.7 and 6.9 percent for eight consecutive quarters. Scholars expressed optimism that 6.5 percent growth for 2017 could be achieved.

Official statistics revealed that the GDP for the first two quarters totaled 38.15 trillion yuan, up by 6.9 percent year-on-year calculated at comparable prices. Of the total, value added by the primary industry reached 2.2 trillion yuan, up by 3.5 percent year-on-year; value added by the secondary industry reached 15.3 trillion yuan, up 6.4 percent; and that for the tertiary industry reached 20.65 trillion yuan, up 7.7 percent.

Industrial rebound exceeded expectations, said Liu Yuanchun, vice-president of Renmin University of China. The global economic recovery fueled exports and this—together with steady growth in domestic consumption—contributed to high growth rates in the first half, he said.

The tertiary industry accounted for 54.1 percent of the national economy, 14 percentage points higher than that of the secondary. Scholars said this means that the service industry has become the major economic driver for steady progress.

Cao Heping, a professor of economics at Peking University, said that the surge of the tertiary industry represented rapid restructuring. New drivers of this industry featuring “Internet Plus” have become increasingly stronger. New forms stand out, including high-tech, strategic and emerging services as well as producer services.

Official statistics showed destocking efforts in real estate have been successful. By the end of June, the floor space of commercial housing for sale decreased by 9.6 percent year-on-year, 3.2 percentage points higher than that of late March. The leverage ratio of enterprises also decreased. By the end of May, the asset-liability ratio of industrial enterprises above the designated size was 56.1 percent, down 0.7 percentage points year-on-year.

“The expansion of effective and high-end supply propelled new technology and emerging industries, which boosted economic growth and supported demand upgrading,” said Tang Duoduo, deputy head of the Department of Macroeconomics under the Institute of Economics at the Chinese Academy of Social Sciences. Supply-side structural reform has focused on economic restructuring, optimizing the allocation of productive factors, and improving the quality and quantity of economic growth. In recent years, it has laid a solid foundation for further progress.

Domestic economic growth for the second half of this year depends on world economic dynamics and domestic macroeconomic contraction. Analysis for the first half foreshadows a steady progress in the second half, scholars said.

“Further deleveraging is required to prevent an asset bubble, and release capital to the real economy and productive economic sectors,” Cao said, adding that the key to preventing a bubble is to deleverage financial institutions of the secondary market instead of the liquidity of the real economy.
Tang added that further regulation of the financial market is necessary. Supervision of shadow banking should be strengthened and prudent monetary policy implemented. Moreover, Tang noted that we should not affect the real economy when preventing systemic financial risks.