China’s leadership is preparing fresh stimulus spending to ensure that signs of economic weakening don’t put the country’s 2015 growth target out of reach, a danger that was underscored by a deterioration in manufacturing in July.
Ahead of the top leadership’s annual gathering at the Beidaihe seaside resort east of Beijing, the Communist Party’s Politburo pledged last week to make “preemptive” policy adjustments in the second half. Premier Li Keqiang highlighted one area targeted for spending will be a “severely outdated” underground pipe system in the nation’s expanding megacities.
Factories could use the work that such construction projects will bring, with a private manufacturing gauge released on Monday falling to a two-year low. An official factory index on Saturday slipped to a five-month low in July, amid a drop in new orders and jobs, adding to threats that include a near-$4 trillion rout in Chinese stocks and a fall in car sales that endanger Li’s goal of about 7-percent growth this year.