China's July PMI rises to 2-yr peak at 51.7

In the first six months, total national fiscal spending expanded 15.8 percent from a year ago to 6.92 trillion yuan ($1.12 trillion). For June alone, the figure surged 26.1 percent to 1.65 trillion yuan.

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Along with the proactive fiscal policy, more focus has been put on optimizing credit structure by giving more financing support to small business against the backdrop of prudent monetary policy and reasonable credit growth.

Helped in part by these efforts, China's economic growth showed recovery signs in the second quarter, accelerating to 7.5 percent from the 7.4-percent expansion in first quarter.

But Zhao cautioned that the foundation for recovery in the real economy is not solid enough as small and micro-sized enterprises still either have difficulties accessing funds or face high financing costs.

To further ease financing costs in the real economy, a State Council meeting last month outlined ten specific measures, including more support to small businesses through relending, cutting redundant procedures, and cleaning up unnecessary charges to give companies in targeted sectors easier access to money.

Looking into the latter half of the year, Chinese authorities have signalled that they will continue to rely on targeted macro policies to ensure economic growth stays within a proper range.

"If the official PMI can maintain the pace above 51.5 in August and September, China's GDP growth could be maintained at 7.5 percent in the third quarter," said Bank of America Merrill Lynch in a research note.