Economic policy

China to monitor adoption of economic policy

STRICTLY ENFORCING POLICY Visitors are seen at the annual theme exhibition area of ​​the China National Convention Center during the China International Trade in Services Fair 2022 in Beijing, capital of China, Saturday, Sept. 3, 2022. The State Council, China’s Cabinet, has assigned task forces to some major economic provinces to oversee the local implementation of far-reaching policies aimed at stabilizing the economy as the country develops regional economic powerhouses to fuel the growth momentum through a multitude of targeted measures. AFP PHOTO

The State Council, China’s Cabinet, has assigned task forces to some major economic provinces to oversee the local implementation of far-reaching policies aimed at stabilizing the economy as the country develops regional economic powerhouses. to fuel the growth momentum through a series of targeted measures.

As task forces – led by ministers – have appointed frontline oversight and assistance roles in a rare pro-growth move, the country’s dynamic policy packages should be fully harnessed to anchor the economy towards a stronger recovery despite a haze of domestic and global uncertainties, economists said.

Hoping for a recovery in some of the weak links in the economy, notably the real estate sector, economists have bet on an upgrade in the industry, as evidenced for example by the country’s global leadership in new energy vehicles (NEVs). to fuel the eventual recovery of the Chinese economy. .

Special working groups

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Quickly following the announcement of 19 measures at a State Council executive meeting on Wednesday, which was interpreted as China’s pro-stabilization 2.0 policy package on top of the 33 pro-growth measures that came in late May, the Cabinet sent a special message working groups to several regional economic powers.

So far, five task forces have been appointed under an action plan revealed by Wednesday’s executive meeting to immediately dispatch task forces for monitoring and economic stabilization services to economic provinces. unspecified majors according to local government assignments.

Specifically, a supervisory working group led by Ni Hong, minister of housing and urban-rural development, arrived in east China’s Fujian Province on Thursday. Another team led by Transport Minister Li Xiaopeng arrived in central China’s Hubei Province on Friday.

Water Resources Minister Li Guoying led another task force in central China’s Hunan Province from Thursday to Saturday.

In addition, Ecology and Environment Minister Huang Runqiu addressed a meeting in Jinan, east China’s Shandong Province on Friday, joined by a work team led by Huang Runqiu and the provincial government. An on-site meeting for supervising and coordinating the pro-stabilization push in central China’s Henan Province was also held in Zhengzhou on Saturday, attended by People’s Bank of China Governor Yi Gang, the country’s central bank.

The State Council’s decision to send task forces to a number of provincial regions comes at a pivotal time to consolidate the foundations for economic recovery, China Construction News reported on Friday, citing the Minister of Housing and urban-rural development.

Describing the dispatch as a major step to truly implement the two sets of policies that have been unveiled, Ni stressed that the task forces are meant to be goal and problem oriented, helping local governments to cope. to the real difficulties and speed up the implementation of the project, according to Friday’s report.

“Having these special missions led by ministers is a rarity,” as the country aims to navigate the economy through the downside risks emerging in July amid domestic and foreign perplexities, Tian Yun, an economist based on in Beijing.

A previous growth campaign in late May, consisting mainly of the State Council’s unprecedented nationwide videoconference with reportedly more than 100,000 attendees and the 33-measure package, was the precursor to an all-encompassing economic rebound. throughout the month of June.

Nevertheless, while the economy continues its recovery trend since June, the foundations for the rebound are not solid, the executive Cabinet meeting stressed on Wednesday.

Record heat waves and droughts in the past two months are among the headwinds weighing on consumer confidence and infrastructure development. Additionally, sporadic outbreaks of Omicron have impacted economic activity in affected regions, Lian Ping, chief economist and director of the Zhixin Investment Research Institute, told the Global Times on Sunday.

Still, economically developed coastal regions remain largely untouched in terms of growth momentum, Lian said, believing the task force’s mission will be a boost in the arm of China’s economy in the last four months of the year. ‘year.

Fiscal and monetary policies available are quite sufficient, as measured by the robustness of policy measures, the economist noted, noting that it is local policy implementation that is expected to be significantly accelerated in the wake of the new mission, thereby enabling policies to deliver the desired results.

The fact that the country’s policies were enforced against the US-led monetary tightening cycle is seen as proof of China’s political independence and determination to support the economy, world watchers said. market.

In a new sign of political strength, as of August 15, implemented value-added tax credit refunds totaled 2.01 trillion yuan ($292.94 billion) since the newly added credits were added. began to be reimbursed in April, the People’s Daily reported on Saturday. citing data from the State Tax Administration.

Double

With regional economic powers at the heart of the national stabilization push, the latest mission is expected to boost the economy as a whole, observers said, expecting economic weak links to be dealt with well while the positives continue. to rush.

Take for example the Fujian-led task force. The task force, led by Ni, inspected Fujian’s capital Fuzhou and the city of Fuqing on Friday, where the task force learned about local infrastructure development and local efforts to ensure project delivery. accommodation blocked.

Among the 19 policy measures introduced last week is one that allows for a city-tailored approach to using credit to support inelastic housing demand and homeowners considering a shift to bigger, nicer homes.

Policymakers have apparently identified the pillars for the economic restart, according to Lian, also chairman of the China Chief Economist Forum in Shanghai.

If home sales can regain growth momentum in the coming months, coupled with an upward trend in land auctions, the real estate sector should experience a strong comeback, he continued.

This, coupled with expectations of a rebound in consumption and an optimistic scenario that exports would retain their resilience for the rest of the year, would put the economy on track for a more pronounced recovery, according to forecasts. the Economist.

In a research note sent to the Global Times earlier in August, Moody’s expected “the country’s annual infrastructure spending to grow at high digits given strong government pressure for the sector to support growth. and stability” in a context of economic difficulties.

The roll-out of measures to support the development of private enterprises and the platform economy, in line with last week’s Policy Package 2.0, is also seen as a tailwind to stabilizing the economy.

In addition, Friday’s announcement of a long-awaited audit oversight agreement signed between China and the United States would bode well for domestic platform companies listed in the United States, as the uncertainties that remain over to their actions abroad appear to largely give way to a more cooperative rhetoric among global players. two biggest savings when it comes to their audit working papers, analysts said.

On top of that, as Tian said, China’s economy would remain a silver lining that breaks through the global economic gloom in the NEV field that exemplifies the industrial modernization of the economy.

By the end of 2021, cumulative NEV sales exceeded 16 million globally, with China accounting for more than half, Xinhua News Agency reported on Saturday, citing statistics revealed at an NEV conference in Beijing.

In the first half of 2022, global NEV sales increased 66.3% year-on-year to over 4.22 million, while NEV sales in China soared 115% year-on-year to 2.6 million, according to the report.