China’s Consumption Expected To Stabilize Growth For Second Half
China's consumption is expected to keep increasing as the month's pass, paving the way for more stability and potential growth for the second half of this year.
The Ministry of Commerce said consumption will be driven by the government's tax cuts as well as a stable job market.
According to China Daily, the Ministry said China's consumer goods sales saw a significant hike of 8.4 percent in the first half of 2019, indicating a more positive trend for the upcoming months.
The figures were revealed a week after China's Q2 data suggested a slowdown in economic growth. Despite the lower figures, increasing consumption is expected to help improve the numbers for the rest of the year.
Some of the products that saw significant attention from consumers are edible oils and grains, traditional medicine, and some beverages. To help boost further consumption, the government will help support developments in old residences in different cities.
The Ministry's Department of Market Operation and Consumption Promotion will stimulate further domestic consumption by helping create jobs in cities and rural regions in the country.
It is further expected that more people will be inclined to purchasing high-tech products, specifically those under the augmented-reality and virtual reality segments. Services will also gain popularity in the Chinese market, analysts predicted.
Imported goods will also remain as key drivers in consumption, as indicated by figures from March to May. An estimated 79.6 percent of Chinese consumers purchased imported products, data revealed.
U.S. President Donald Trump claimed that the trade war has started taking a toll on the Chinese economy, as suggested by the 6.2 percent growth that China posted for the second quarter.
Beijing has responded to the claims, noting that the White House should not be "misleading" people to believe that China will back down in the trade war because of its slower growth figures.
The Chinese government is also expected to keep working on its goal of encouraging local consumption as a means of bolstering growth. After all, China is known for bouncing back despite setbacks in the past.
A Barron's report further suggested that the economic growth numbers cannot overshadow the fact that industrial production beat analyst expectations for June. Retail sales also posted strong figures for the same month.
"Sharp pencils will weight the uptick in monthly indicators - a positive forward-looking development - as more important than the backward-looking GDP figures, chief international economist for High-Frequency Economics, Carl B. Weinberg, noted.
China has the rest of the year to prove Trump's claims wrong as Beijing continues to stand firm on its ground regarding its requests for the trade deal.