Experts: China's Economy Stabilizing, Seeing Upturn

Experts say China's economy saw an upturn in the first half of this year as the government adopted a raft of economic stimulus polices to fight against the global financial crisis.

Zhang Shuangfeng has more.

Reporter:

Zhang Ping, an economic researcher from Chinese Academy of Social Sciences say China's economy is bottoming out now.

"A lot of data is now showing signs of economic recovery. China's Purchase Management Index has been above 50 for months. In the first quarter this year, domestic consumption was up 15 percent and investment grew by 30 percent, both arriving at a high level. GDP growth in the first quarter was 6.1 percent, which should be the lowest level."

Zhang Ping explains that the government's economic stimulus package is playing an important role in helping China climb out of the economic slump.

"The government has made great efforts. It has adopted proactive fiscal policy. Chinese banks have extended more than 7 trillion yuan of new loans in the first half. But before 2005, banks made only about 2 trillion yuan of new loans each year. Since the size of China's economy is big, the government has to increase its stimulus efforts."

Zhang Liancheng is head of the school of economics at Beijing's Capital University of Economics and Business. He says China's economic strength is also essential to its economic recovery.

"Economic policies should be supported by economic strength. At present, China's economic strength is at its best ever level. Chinese residents' savings deposits total 20 trillion yuan. China's foreign exchange reserve is about 2 trillion U.S. dollars. Economic power serves as a solid foundation for the government to launch economic stimulus policy."

Zhang Lianchang says it will still take a long time for China to fully recover as the economy still remains a little shaky and the real estate industry still has risks.

To help speed up the recovery he says the key is to increase people's purchasing power.

Zhang Shuangfeng, CRI News