China's premier, Li Keqiang, said the economy's fundamentals were good and major indicators were improving, although the government would strengthen targeted policy adjustments, according to state-owned China Central Television. China's annual economic growth slowed to a six-year-low of 7 percent in the first quarter, weighed down by a cooling property sector.
Recent data showed a further loss of momentum heading into the second quarter, although two private surveys showed signs of steadying in June as the government adopted stimulus measures to combat a protracted slowdown. "Currently China's economic fundamentals are good. Main economic indicators such as industrial output, investment, consumption, exports and imports have stabilised and showed improvements since May," Li was quoted as saying.
"Employment is stabilising and increasing. The economic performance is within a reasonable range." The government will strengthen targeted policy adjustments, Li said, adding that China was able to maintain a mid to high growth rate. The central bank has cut interest rates and bank reserve requirements to lower borrowing costs and encourage more lending, while the government is stepping up fiscal spending. Most analysts still expect the central bank to loosen policy further, although some have pared their expectations for easing amid signs of steadying growth and fears over stock market bubbles.
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