'Higher people's confidence to boost domestic demand'
A Beijing-based commentator said China is trying to boost people's confidence to help shore up domestic demand and overall economic growth. The end of the Communist Party's third plenum on Thursday saw the adoption of a resolution on further deepening reform comprehensively, with the goal of building a high-standard socialist market economy by 2035. Latest government figures showed growth in the world's second-largest economy slowed to 4.7 percent in the second quarter, down from 5.3 percent in the January-March period. Retail sales also reported slower growth, from 3.7 percent in May to 2 percent in June. "In terms of domestic demand, they're trying to instil confidence. They want people to believe in what the party is doing, the fact that China is 30 percent of the world's growth, that it continues to be the centre of manufacturing," Einar Tanger, a senior fellow at the Taihe Institute and chairman of Asia Narratives, told RTHK's Hong Kong Today programme. "Chinese consumers should realise that, that China is in a better position to weather the current storms and uncertainties that are being caused internationally." Tanger said another key challenge for the authorities is to stabilise the housing market. "The real estate sector is a product of very large companies taking huge leverage. They were borrowing massive amounts of money on the expectation that they'd make lots of profits. Unfortunately, the demand did not justify supply. "The government does not want to see a spiral of inflationary rises in housing prices because they're already too high. So what they're trying to do is to keep them steady. So you can expect them to continue to say, 'Look, if you've bought a house, we'll make sure that it gets finished,' but they're not going to put money into the pockets of these very wealthy developers who have not been very good businessmen."