China treads cautiously to rebalance economy

Updated: 2013-08-02 10:33


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BEIJING -- Despite all the heightened attention and occasional panic over China's economic health, authorities in the world's second-largest economy have so far remained confident of the ongoing rebalancing act.

On Tuesday, the Political Bureau of the Communist Party of China (CPC) Central Committee pledged at a meeting to keep the economy growing steadily in the second half of this year, while promising to fine-tune policies when necessary.

"The macro policy should be stable, the micro policy should be flexible and the social policy should support the bottom line. All of them should be coordinated," read the statement released after the meeting.

The comments were seen as a reaffirmation that a stable environment is necessary for pushing ahead with reforms for long-term sustainable growth.

"A stable policy environment would not only allow time for the market to adjust itself, but also help create a favorable condition for reforms and avoid drastic fluctuations in market expectations," said Kuang Xianming, director of economic research with the China Institute for Reform and Development.

Drastic policy changes are unlikely unless there are unforeseeable external or internal shocks, he added.

China's economy expanded 7.6 percent in the first half of the year, slightly above the annual 7.5-percent target set for 2013, and prospects for the second half remain complicated given the sluggish external market, weak domestic strength, persisting overcapacity and growing financial risks.

Chinese leaders have so far demonstrated greater tolerance for slower growth in their efforts to switch the country's growth model from its dependence on credit expansion and manufacturing toward one driven by consumption, innovation and services.

Instead of initiating a massive stimulus program again to lift the economy, the authorities are moving cautiously to steady growth while driving through reforms in which President Xi Jinping has called for "greater political courage and wisdom."

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