China to boost effective demand for stronger economic recovery – Xinhua

Citizens visit Qianmen Street, an iconic shopping street in Beijing, capital of China, July 6, 2022. (Xinhua/Li Xin)

BEIJING, July 22 (Xinhua) — China will adopt policy measures to increase effective demand to strengthen the engine of economic recovery and growth, according to the decision taken at the executive meeting of the Beijing Business Council on Thursday. State chaired by Premier Li Keqiang.

The meeting noted that the Chinese economy is at a crucial stage of stabilization and recovery, and the third quarter is of vital importance. It is essential to effectively coordinate the COVID-19 response with economic and social development, and to continue implementing the package of measures aimed at stabilizing the economy.

Efforts will be intensified to shore up the foundations for economic recovery, stabilize overall economic performance and maintain key economic indicators within an appropriate range, with priority given to job security and price stability.

Much remains to be done to bring out the effects of policy-backed and development-oriented financial instruments and special purpose bonds. These measures will help catalyze a large amount of private investment and should be better exploited on the basis of market principles.

Effective investments should be fully utilized to strengthen weak links, facilitate structural adjustments, stimulate consumption and create jobs, in order to leverage its key role in economic recovery and growth.

“Policy-backed and development-oriented financial instruments should help generate physical gains as quickly as possible and catalyze commercial bank lending,” Li said.

The meeting decided to establish an effective investment coordination mechanism for major projects, with joint administration and parallel review by relevant departments to ensure consistency and efficiency.

The selected projects should bring both immediate and long-term benefits, contribute to strengthening the fundamental foundations of economic and social development, be in line with the 14th Five-Year Plan and other plans, generate economic returns and start as quickly as possible.

Land use and energy consumption quotas for large projects will be set separately in accordance with the relevant regulations. The development of competitive industries will remain entirely market-based.

Funds from policy-supported and development-oriented financial instruments will be well used in accordance with laws and regulations. Greater incentives will be provided and funds will not simply be distributed among localities. Localities with more mature projects will receive more support.

The meeting urged accelerating the use of special purpose bonds and guiding commercial banks towards supportive funding. The newly added line of credit from strategic banks is expected to be provided in a timely manner.

All localities must ensure that projects move at a faster pace and meet quality requirements. Conditions will be created to ensure that operations at construction sites are not suspended and related industrial and supply chains remain uninterrupted, to generate more physical gains in the third quarter. Wherever possible, more job opportunities will be offered to migrant workers through public works programs.

Inter-agency working groups will be dispatched to localities in due course to oversee and facilitate the implementation of the project. Management and auditing will be strengthened to ensure project quality and prevent corruption and rent seeking.

“During the implementation of the project, consumer-friendly measures and work assistance programs should be used whenever possible,” Li said.

The meeting noted that consumption is closely linked to people’s lives and is still expected to serve as a major driver of growth.

Financial institutions will be supported to offer more flexible terms for personal consumer loans impacted by COVID-19. City-specific policies will be adopted to promote steady and healthy development of the real estate sector. People’s basic housing needs will be met and their desire to improve housing conditions will be supported where appropriate.

Specific measures will be put in place for the healthy and regulated development of the platform economy, in order to guide platform companies towards inclusive financial services in compliance with laws and regulations.

The role of the platform economy in creating jobs and stimulating consumption will be better highlighted. Financial support for import and export will be increased and services such as exchange rate hedging will be actively offered to businesses.