BEIJING (Reuters) - China’s economy is stabilizing slowly as pro-growth government policies gain traction while real estate curbs have surpressed speculation, the head of the country’s top planning agency, the National Development and Reform Commission, said on Wednesday.
Zhang told a meeting of the National People’s Congress (NPC), China’s top legislature, that China’s two-pronged policy programme had been effective.
“The government’s policies and measures have been effective and the country’s economic growth is stabilizing at a slow pace,” Zhang Ping, chief of NDRC was quoted by the official Xinhua news agency as saying.
“Speculative and investment demand have been effectively surpressed due to government control policies for the real estate market,” he added.
Investors are nervously eyeing China’s domestic policy mix as external demand for the country’s vast export-oriented factory goods sinks with its biggest customer - the European Union - mired in a mess of sovereign debt and recession risks.
To boost China’s economy, the government has fast-tracked investment spending on key projects, cut the amount of cash banks must hold as reserves by 150 basis points in three steps and lowered interest rates twice in a space of one month.
But weak economic data in July has fanned worries that the economic slowdown may run into a seventh straight quarter in the three months of July-September, further raising expectations of fresh government action to shore up growth.
China’s economy grew 7.6 percent year-on-year in the second quarter, its slowest pace in more than three years. The country is forecast to deliver its slowest full year of growth since 1999, at just 8 percent, according to the latest Reuters poll.
Zhang was delivering a report to China’s lawmakers on the progress of national economic and development plans in the first half of 2012. (Reporting By Xiaoyi Shao and Koh Gui Qing; Editing by Nick Edwards)