Summary
- China to step up macroeconomic adjustments – Politburo
- Says will focus on expanding domestic demand
- Will adjust and optimise property policies at appropriate time
- Says the economy faces new difficulties and challenges
BEIJING, July 24 (Reuters) – China will step up its policy support for the economy amid a tortuous post-COVID recovery, focusing on boosting domestic demand, the Politburo, a top decision-making body of the ruling Communist Party, said on Monday, the state-run Xinhua news agency reported.
The world’s second-largest economy grew at a frail pace in the second quarter as demand weakened at home and abroad, raising pressure on policymakers to deliver more stimulus to shore up post-COVID
“Currently, China’s economy is facing new difficulties and challenges, which mainly arise from insufficient domestic demand, difficulties in the operation of some enterprises, risks and hidden dangers in key areas, as well as a grim and complex external environment,” Xinhua cited the Politburo as saying.
Top leaders pledged to “intensify macroeconomic policy adjustments, focus on expanding domestic demand, boosting confidence and preventing risks, and continuously promote the improvement of economic operations,” Xinhua said.
China will implement its macro adjustments in a precise and forceful manner and strengthen counter-cyclical adjustments, as the government sticks with a prudent monetary policy and pro-active fiscal policy, the Politburo was quoted as saying.
Separately, Xinhua quoted President Xi as saying during a meeting with non-Chinese Communist Party members that China will strive to achieve its annual development targets.
While China is seen on track to hit its modest 2023 growth target of around 5%, there are risks of the annual goal being missed for the second year in a row, analysts said.
A senior central bank official said earlier this month the bank will use policy tools such as the reserve requirement ratio (RRR) to weather the challenges facing the world’s second-largest economy.
China will actively expand domestic demand, boosting residents’ incomes to unleash the fundamental role of consumption in driving economic growth, while speeding up local special bond issuance to spur investment. Xinhua said.
The government will boost demand for autos, electronics and household products and promote tourism consumption, Xinhua added.
China will adjust and optimise property policies at an appropriate time, in response to “significant changes” in the supply and demand relationship in the property market, Xinhua said.
Amid the mounting local debt repayment burden, China will effectively resolve local government debt risks and formulate a basket of plans to resolve local debt issues, Xinhua said.
China will improve the development environment for private firms and stabilise trade and foreign investment, Xinhua said.
China last week also released guidelines to improve the private sector and vowed to make it “bigger, better and stronger.”
