Source: Global Times    Published: 2018-7-17

An official from China's top economic planner said Tuesday that the commission will speed up an assessment of negative impacts on domestic companies arising from the ongoing Sino-US trade row, and will provide "targeted support" after this assessment.  

The official of the National Development and Reform Commission (NDRC), however, did not give any further details.

The remarks came after data from the National Bureau of Statistics on Monday showed that in the second quarter, China's GDP rose by 6.7 percent year-on-year, slightly lower than 6.8 percent in the first quarter. However, the figure fell into the normal range of 6.7 to 6.9 percent.

Some observers had suggested that the unstable external environment would pose difficulties for China to achieve its economic growth target in the second quarter.

"The decline of some related indicators does not necessarily mean that the economic growth rate is slowing, and some positive factors such as consumption upgrading are not be reflected in these indicators," said Yan Pengcheng, spokesperson for the NDRC, adding that China's investment and consumption structure has been continuously optimized.

"We have ample policy tools to cope with the shocks brought by the uncertainties in the world economy, and to maintain sound and stable economic growth in the second half," Yan told a regular conference on Tuesday.

He Weiwen, a senior fellow at the Center for China and Globalization (CCG), said that for some companies that might suffer higher costs due to the US tariffs, the government might consider compensation in terms of subsidies. As for those who lose their jobs amid the dispute, the government might compensate them in other ways such as by providing training or re-employment.

But there are also a certain number of companies that provide goods that the US can only import from China, so the situation depends on the specific details, He told the Global Times on Tuesday.

"China's dependence on foreign trade is declining. The driving force for the domestic economy has shifted from excessive dependence on investment and exports, to consumption, the services industry and domestic demand," said Yan, adding that the contribution of consumption and services to China's economic growth has reached 60 percent.

He also added that external elements such as Sino-US trade tensions would have a limited influence on the country's economy.

According to He, exports to the US account for 2 percent of China's total industrial output by value, so even if the US imposes tariff on half of imports from China, only 1 percent of industrial output will be affected. "People should not 'exaggerate' the impact of the US on the Chinese economy."

"Now, the priority for China's economic development is to continue deleveraging, in a bid to prevent domestic financial risks," He noted.

He Weiwen is a senior fellow of Chongyang Institute for Financial Studies at Renmin University of China.