(Yicai Global) June 14 -- The impact of the US Federal Reserve’s interest rate hike on the Chinese economy will be limited in the short term, said a spokesman for China’s national statistics bureau today.
Given the expected development trend of the world’s second-largest economy in the second half of this year despite external uncertainties and increased instability, China still expects a global economic recovery and continued expansion of the world trade, said Mao Shengyong, spokesman for the National Bureau of Statistics in a press conference today.
The Fed raised the base interest rate by 25 basis points yesterday, bringing its benchmark rate to a range of 1.75 percent to 2 percent.
Commenting on Fed’s move Mao said the market expected Fed’s decision and looks to further hikes in the second half of the year.
China’s foreign trade still has the condition to sustain a stable and improved development, Mao added.
In China, consumption has been contributing around 60 percent to economic growth in a stable manner in recent years, becoming an increasingly essential driver for growth, the NBS spokesman said.
The reform and opening up also stimulate the vitality of the economy, Mao said. The industry has achieved a stable growth over the past two years and registered around 6.5 percent growth rate in most months last year. Moreover, it is also growing steadily this year.
Industrial output expanded 6.8 percent year-on-year last month, slower than the 7 percent rise in April but still faster than the 6 percent surge in March, Xinhua News Agency reported, citing data from NBS data. In the first five months of this year, industrial output jumped 6.9 percent annually, flat with the first four months.
The service sector also remains a stable growth driver as well, said Mao. The service sector gained momentum, with its production index up 8.1 percent last month, slightly higher than that in April. Software, information technology and business services picked up pace.
Therefore, Chinese economy will maintain a positive growth trend in the second half of this year, with about 6.5 percent growth rate expected this year, Mao added.
Analyzing external factors, Mao said, on the one hand, the developed economies have changed their monetary policy, shifting from quantitative easing policy to competitive tax reduction policies. With the deepening international trade friction, overall imbalance and instability are on the rise in the world economy, Mao noted.
On the other hand, the developed countries have seen a stable growth rate and inflation, as well as satisfactory employment levels, creating a positive economic trend.
Therefore, the global economy and international trade will continue to expand, Mao said. Such external circumstances create positive conditions for China’s economy and foreign trade.
Editor: Mevlut Katik