Market News International:
As the speaker said just now, China's economic rebound is expected to continue in the second half of 2020. If so, will the emergency policies adopted in the first half, such as expansionary fiscal and monetary stimuli, be slowed down or phased out? In H1, China's real estate investment registered robust growth, providing considerable support for economic recovery. Will real estate investment remain strong in H2? The total retail sales of consumer goods still suffered a year-on-year decline in June. Do you think China's domestic demand is now obviously weak? What policies will be taken to boost domestic demand?
Liu Aihua:
Thank you for your questions. The first question is whether the policies introduced in H1 will be adjusted. We need to have a correct understanding of the current economic situation. China's economy showed a significant recovery in the second quarter. Most economic indicators improved or declined at a slower pace in H1. Meanwhile, we also need to be aware that, judging from the cumulative speed seen in H1, GDP and most other indicators in such areas as industry, service, investment and consumption are still in a state of decline. Therefore, we define the current economic recovery only as restorative growth. As for policy adjustment in H2, the Government Work Report has made specific plans. Macro policies should be both forceful and sustainable, and they may be adjusted as called for. In other words, the polices we've adopted are flexible, and they will be moderately adjusted according to future developments in H2, as well as the implementation of measures to ensure stability on six fronts and maintain security in six areas.
The second question is about the current situation regarding real estate investment and its trend in H2. China's real estate investment rose 1.9% in the first six months year-on-year. However, many other indicators are still flat, such as floor space under construction , land purchased and sales of commercial housing. So, further observation is required to judge the trend in real estate development in H2.
The third question is about the total retail sales of consumer goods in H1. The total fell 11.4% year-on-year in the first half. It shows that there are still constraints on the recovery of consumption. As regular COVID-19 control is continued, some forms of consumption involving gatherings or human contact are still being restricted. So, catering industry revenue is still only moving towards restorative growth. Concerning the development of the consumer market in H2, as effective epidemic control measures continue to deliver progress, people will find it more convenient to go out for purposes of consumption. In addition, as supply-side structural reform is further advanced, there will be constantly optimized provision for high-quality goods and services. Despite these favorable conditions, we also need to recognize unfavorable ones. As you noticed, China's per capita disposable income increased in nominal terms in the first half of this year, but fell 1.3% in real terms. So, greater efforts will be needed to boost consumption in the second half of the year.
