NEW YORK: China's buoyant economic expansion for the first quarter (Q1) has been largely propelled by the country's fiscal stimulus as well as energetic reform and opening-up, a U.S. scholar has said.
"The greater emphasis on both fiscal measures and on supply-side measures, in contrast to purely demand management measures, is somewhat of a break with the past and deserves to be highly applauded," Sourabh Gupta, a senior fellow at the Washington-based Institute for China-America Studies, told Xinhua in an interview on Friday, reports Xinhua.China's gross domestic product (GDP) growth notched a rate of 6.4 percent year on year in the first quarter, topping market forecasts and on par with that of the previous quarter, the National Bureau of Statistics (NBS) reported Wednesday.
The sturdy expansion was mainly driven by a striking 8.3-percent growth in retail sales of consumer goods year on year, which constitutes an overwhelming 65.1 percent in the quarterly GDP, among major indicators that fared better than expectations.
Meanwhile, a 7-percent increase in the tertiary sector, marking the strongest growth in added value, and a significant 6.5-percent upswing in industrial output for the first quarter also indicated improving economic conditions, especially an expanding manufacturing sector, which Gupta viewed as "a very good sign." Such indicators showed that "the darkening cloud over the Chinese economy is passing and it is once again headed for a period of sustained and self-sustaining private sector-led growth," the scholar said.
To reach such an encouraging growth, Gupta believed that the Chinese authorities have struck a "delicate and correct" balance between introducing supply-side measures, such as tax incentives and reduction of fees, and demand management measures, such as loosening credits. He added that the balance "between excess stimulus and policy passivity" has also been well maintained by the central government in the face of downside risks, amid market concerns over domestic growth, trade tensions with the United States and a potential global economic slowdown.