Investments in high-tech sectors and infrastructure projects may help mitigate potential downward pressure on the Chinese economy in the second half (H2) of this year, an economist said.
The economy may encounter challenges in H2 as pent-up demand subsides and property tightening measures bite, but enough fiscal room for investment may help address the potential downward pressure, said Lu Ting, chief China economist with Nomura Securities.
The amount of debt issuance by the central and local governments in H1 was notably less than half of the quota for the whole year, indicating fiscal room for more infrastructure investment to counter a potential decline in growth pace, Lu said in a press briefing.
He said that the country is also likely to step up investments in high-end manufacturing in H2 as such moves can stimulate short-term growth and are in line with the country's longer-term growth strategy.
China's gross domestic product expanded 12.7 percent year on year in H1, the latest official data showed, indicating resilience in recovery.
A series of economic indicators including industrial profits and medium-to-long-term loans to the industrial sector saw robust growth in the past few months, Lu noted, adding that such increases indicate further growth prospects for manufacturing investment.