China’s second-quarter GDP is expected to grow at a faster rate in year-on-year terms, and the country “has the confidence, ability and conditions” to achieve its GDP target of around 5 percent this year, said Yi Gang, governor of the People’s Bank of China, according to a statement on the website of the central bank on Friday.
The comment was made during a symposium Yi held with representatives from domestic and foreign companies and financial institutions, including Philips (China) Investment Co and Citibank (China) in Shanghai on Wednesday.
Industry observers said the meeting is seen as sending out a welcoming gesture to foreign financial institutions, among a series of concrete remarks made by Chinese financial officials in recent days.
The door of the country’s financial industry will be opened wider and wider, Li Yunze, head of China’s National Financial Regulatory Administration (NFRA), China’s new financial regulatory body, said at the annual Lujiazui Forum in Shanghai on Thursday, which senior representatives from HSBC, Credit Agricole, Merrill Lynch, Mizuho Financial, Schroders and Paypal reportedly also attended.
“We warmly welcome foreign-funded institutions with sound operations and excellent qualifications to expand their business in China, and encourage qualified financial institutions to participate in various business pilot programs,” Li said, adding that opening-up is China’s long-term national policy.
According to Li, China’s financial industry has released over 50 opening-up measures in recent years, including removing caps on foreign shareholding and drastically reducing the “quantities of thresholds” for market access of foreign investment.
In addition to financial opening-up, Yi also gave assured at the meeting that the Chinese economy is resilient, has great potential and has sufficient policy space. “So we must have confidence and patience in the sustained and stable growth of the Chinese economy,” Yi said.
Yi noted that as consumption scenarios recover, Chinese residents’ consumption spending will also be expanded, which will translate into rising incomes of enterprises and employees, thus driving more consumption. As such, it is expected that consumer price index (CPI), a gauge of inflation, will gradually climb in the second half and reach over 1 percent in December.
China’s CPI increased moderately in May, as consumer demand continued to recover, further shrugging off market concerns about deflation in the country, hyped by some foreign media outlets.
The CPI jumped by a moderate 0.2 percent year-on-year in May, up from 0.1 percent growth in April, data from the National Bureau of Statistics （NBS） showed on Friday.
The May CPI data showed that consumer demand continued to recover and market conditions generally remained stable, NBS statistician Dong Lijuan said.
Zhou Maohua, an economist from Everbright Bank, told the Global Times on Friday that the current low-price environment matches the pace of recovery of domestic demand, helping to improve the welfare of middle- and low-income groups and will serve to enhance macro policy flexibility.
(Global Times)
