Macro measures to counter difficulties

China's economy will likely stabilize for the rest of the year despite mounting global uncertainties, economists said on Monday, adding that stronger macroeconomic adjustments and deepened reforms are needed to counter external headwinds and reinforce domestic demand.

"It is necessary to step up unconventional countercyclical adjustments, and make full and good use of a more proactive fiscal policy and an appropriately accommodative monetary policy," Huang Hanquan, head of the Chinese Academy of Macroeconomic Research, said at a seminar on China's economic situation and trends held by the academy in Beijing.

Huang called for frontloading of fiscal stimulus measures, speeding up the issuance and use of local government special bonds and ultra-long-term special treasury bonds, and ensuring funding for local regions to stabilize growth.

On monetary policy, he urged timely cuts in the reserve requirement ratio and interest rates, maintaining ample liquidity and increasing support for the real economy, adding that it is also necessary to introduce new structural monetary policy tools to support technological innovation, boost consumption and stabilize foreign trade.

Notably, Huang highlighted the need to boost domestic demand, especially spurring consumption, such as raising incomes for middle and low-income groups, spurring consumption of services in areas like education, healthcare, eldercare, culture and sports, and clearing restrictions hampering consumer spending. Efforts should also be made to help struggling enterprises, ensure people's livelihoods and deepen reforms to unleash development momentum, he said.

Guo Liyan, deputy director of the Chinese Academy of Macroeconomic Research's economic research institute, highlighted China's economic resilience despite facing pressure from weaker external demand.

"Economic stability and improvement are the main trends, favorable conditions are increasing, and the key is to effectively implement the existing package of incremental policies and plan new measures as needed to turn positive factors into actual development momentum," Guo said.

The National Bureau of Statistics said China's GDP expanded 5.4 percent year-on-year in the first quarter, beating market expectations and making a good start to the year amid the impact from US tariffs.

"Looking ahead, China's economy is expected to maintain stable growth, with further strengthening of new growth drivers and the continuous emergence of new growth points," Guo said.

She called for deeper reforms to nurture new growth engines. "The key is to focus on building a unified national market, relying on reform and innovation to cultivate and strengthen new momentum, and making breakthroughs in critical areas."

Guo Guannan, a researcher at the Chinese Academy of Macroeconomic Research, said China should launch a batch of quick-transmission, highly effective reforms to guide expectations, boost confidence and enhance the upward trajectory of the economy.

She said "current consumption demand is insufficient", with retail sales growth still below pre-pandemic levels.