A new blueprint for global growth

China's steady economic development has benefited the people. For us to measure the state of the economy, it's always important to know how the people are feeling. Since the beginning of this year, employment has steadily expanded. In the first six months, 7.18 million new urban jobs were created, meaning 72 percent of our annual target is already met. Surveyed unemployment rate in big cities was around 5.1 percent. In terms of household income, per capita disposal income grew faster than the economy, with the income of rural residents growing faster than that of urban residents. As a result, consumers now have more money in their pocket to spend. Price level has been kept basically stable. Total retail sales increased by more than 10 percent. I have said on many occasions that as long as there is sufficient employment, and if household income could increase in step with the economy and if the environment keeps improving, then a slight change in GDP growth is acceptable.

China's steady economic development has benefited the world. China contributed about 30 percent to global growth in the first half of the year. With commodity prices dropping markedly on the global market, the growth of China's foreign trade volume is slowing down. But even so, the actual amount of commodities China imported has continued to go up. China will adopt a more proactive import policy and place greater emphasis on the quality of imports and exports. And China will only buy more from the world to meet its growing domestic demands. China's outward investment has maintained rapid growth. The number of outbound tourists has notably increased. Last year alone, Chinese tourists made over 100 million trips overseas. In the first half of this year, the number rose by another 10 percent. When Chinese tourists go abroad, they not just go sightseeing but also shopping. This shows that the Chinese people are bullish about the economic prospects. Given the celebrated tradition of frugality in China, people would hardly feel free to spend if they don't have a stable source of income. Of course, one should not forget that more than 70 million people in China are still living in poverty. Yet, the sheer size of the middle-income population also means huge and fast-growing consumer demands. All these serve to prove that China is not a source of risks for the world economy but a real source of strength for world economic growth.

Despite the many difficulties and downward pressure, the Chinese economy is still within the reasonable range. The Chinese economy is deeply integrated into the global market. Given the weak growth of the global economy, China could not stand unaffected. Meanwhile, the deep-seated problems that have built up over the years are thrown into sharper relief. The Chinese economy is in the state of a new normal. It is going through a transition with traditional drivers being replaced by new ones. The extensive model of growth in the manufacturing sector is giving way to more intensive production. And over-reliance on investment is abandoned for greater balance between consumption and investment. This is a painful and challenging process. Ups and downs in growth are hardly avoidable, as they are natural in a period of adjustment and transition. To borrow a concept from traditional Chinese medicine, they are the “pulse” that shows the health of the economy. Over the last two months, we have seen a slip or fluctuation in certain indicators. Yet, the policies and measures adopted in the previous stage are starting to pay off, and positive factors are building up in the economy, hence the upward trend in certain indicators. The fundamentals underpinning a stable Chinese economy have not changed. The ups and downs in the economy may have formed the shape of a curving wave, but the underlying trend remains to be positive. We will not be swayed by short-term fluctuations in economic performance, nor will we take it lightly. We are taking necessary measures of targeted, discretionary and precision macro regulation, mainly to mitigate short-term volatility and prevent its spillover or magnifying effect. We will be fully capable to deal with the situation once signs indicate that the economy is sliding out of the reasonable range. I'm not making an empty promise when I say that the Chinese economy will not head for a “hard landing”. In fact, withstanding considerable downward pressure on the economy in recent years, China did not turn on the money-printing machine or resort to massive stimulus. Instead, we invigorated the economy mainly through deepening reform. This has ensured stability in economic performance and allowed room for future adjustment. The fiscal deficit ratio of the central government is relatively low compared with other major economies. There are still many tools at our disposal for innovative macro regulation. We need to take targeted measures to overcome downward economic pressure, so as to lay the foundation for sustainable and healthy growth in the future. It is like playing the Chinese chess game. We need to be careful with every move we make and also keep up the momentum for the long run.