Despite challenges and pressure from the COVID-19 epidemic and geopolitical tensions, China's economy remains resilient, and the country has plenty of policy tools to maintain sustained and healthy economic development, experts said.

They said China is capable of registering positive growth in the second quarter, which concluded last month, followed by a strong recovery in the second half amid stronger policy support and better control of the pandemic.

The National Bureau of Statistics will release data for the second quarter on Friday.

Liu Xiaoguang, an associate professor at Renmin University of China's National Academy of Development and Strategy, said China's economy may expand slightly in the second quarter, and his team estimated GDP may grow 0.8 percent during the period.

Looking at the second half of the year, Liu told the China Macroeconomy Forum recently that his team forecasts that GDP may increase 6.5 percent in the third quarter and 6.3 percent in the fourth.

Citing inflationary pressure overseas and China's relatively stable prices, Yin Yue, an analyst at Shanghai-listed Hongta Securities, said that the country has sufficient room to step up macro policy support and expects the government to employ new incremental fiscal policy tools to cope with downward pressure.

Citing the 5.5 percent growth target for this year, Liu said China needs to step up efforts to accelerate growth for the rest of the year.

Zhou Maohua, an analyst at China Everbright Bank, said the latest economic indicators showcase the effectiveness of the government's recent stimulus measures to stabilize the economy as China gradually shakes off the impact from recent COVID-19 outbreaks.

Citing improvement in both industrial output and consumption in the past two months, Zhou said China will likely see positive growth in the second quarter, and expects the recovery to speed up in the second half of the year.

China's Small and Medium Enterprises Development Index, which is based on a survey of 3,000 SMEs, rose from 88.2 in May to 88.4 in June, according to the China Association of Small and Medium Enterprises. The index had reported declines for four consecutive months before May's figures.

According to the association, 25.9 percent of businesses had resumed full operation, and 42 percent were operating at over 75 percent capacity.

Zhou Maohua attributed the improvement in SME activity to the accelerated resumption of work and production, a pickup in market demand, efforts to ensure smooth industrial and logistics chains and government measures to stabilize prices and ease burdens on enterprises.

While he believed SMEs would continue to enjoy a favorable environment, Zhou also warned of multiple pressures and difficulties such as rising costs and a shortage of certain necessary parts.

He said more effort should be made to fully implement existing policies to stabilize growth and ensure stable prices and supplies, as well as to encourage financial institutions to increase support for SMEs and deepen reform in the financial sector.

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