As China's economic indicators such as industrial production and domestic demand fell short of market forecasts, authorities published back-to-back commentaries in state media emphasizing "economic vitality." Some interpreted the move as an effort to soothe sentiment, mindful of concerns over a slump in domestic demand triggered by negative data.
On the 23rd, a commentary titled "China is a positive contributor to global economic growth and a powerful anchor of stability" ran on page 2 of the People's Daily, the Chinese Communist Party's organ. It came just a day after a page-2 commentary on the 22nd titled "The resilience and vitality of China's economy," marking a second piece in a similar vein in as many days.
Both commentaries were authored by "Zhong Caiwen" (鐘才文, Zhong Caiwen). Zhong Caiwen means "an article by the Central Financial and Economic Affairs Commission (Director General Secretary Xi Jinping)," a body under the Communist Party's Central Committee. Zhong Caiwen is considered one of the channels for signaling China's fiscal and economic policies. Such commentaries are usually published in central outlets like the People's Daily ahead of major meetings or during economically important periods.
The back-to-back Zhong Caiwen pieces in the People's Daily are seen as a response to a string of recently released weak indicators. China's industrial output for July, announced on the 17th, rose 4.5% from a year earlier, below the market forecast of +5.0%, while retail sales grew just 0.6%, far short of the +1.5% forecast.
In addition, real estate investment from January to July fell 19.2% on-year, and fixed assets investment over the same period declined 6.7%, worse than the -6.2% forecast. In particular, the July manufacturing purchasing managers index (PMI), a gauge of economic trends, dropped to 49.2, the lowest in five months.
In the Zhong Caiwen commentary on the 22nd, it said, "China's economy is currently at a critical juncture of a rapid shift between old and new growth drivers and a transformation of the development model," adding, "When observing China's economy, one should not look only at speed (growth rate), and should even less be bound by the ups and downs of individual quarterly or monthly indicators."
The commentary on the 23rd conveyed that while a complex, changing, and severe external environment is a condition every country in the world faces, China's economy, with a solid foundation and past innovation, has weathered difficulties well and also served as a pillar of the global economy. The move appears mindful of the negative data.
Meanwhile, on the same day Hong Kong outlet Sing Tao Daily said, "The July data suggests the mainland economy has already shifted from 'natural recovery' to reliance on 'policy-based floor support,'" adding, "September will be an important period when fiscal and monetary policy are simultaneously strengthened, and there is a possibility that the intensity and pace of subsequent counter-cyclical adjustment will be increased before the Fifth Plenary Session on Oct.," referring to the Fifth Plenary Session of the 20th Central Committee.