China’s economic regulator is gearing up to introduce a series of pro-growth policies in the third quarter of this year to revitalize China’s economic momentum. The measures will focus on expanding domestic demand, stimulating consumption, boosting private investment, and stabilizing the property sector, according to experts.
In a news conference held on Friday in Beijing, Yuan Da, director of the Department of National Economy at the National Development and Reform Commission, revealed that the country would be studying and planning a batch of targeted and stronger reserve policies. These policies will be promptly deployed as needed to strengthen countercyclical adjustments and bolster macroeconomic regulation.
Liu Dian, an associate researcher at Fudan University’s China Institute, emphasized the significance of expanding domestic demand and confidence while preventing and defusing potential risks. To achieve these goals, Liu suggested policymakers increase spending on public services, issue consumer vouchers, and boost transfer payments to local governments, thereby stimulating demand, consumption, and investment.
Ye Yindan, a researcher at the Bank of China Research Institute, expects the implementation of a comprehensive set of stimulus policies in the third quarter. These policies will primarily focus on encouraging consumption, boosting the confidence of private enterprises, and stabilizing the housing market.
During the same news conference, Zou Lan, the head of the monetary policy department of the People’s Bank of China, reassured the public that the central bank is prepared to roll out new policy tools as required. These tools will aim to provide continuous support to key areas such as inclusive finance, green initiatives, and low-carbon sectors.
In addition to policy tools like reserve requirement ratio cuts, open market operations, and medium-term lending facilities, Yang Haiping, a researcher at the Institute of Securities and Futures, suggested that the central bank could introduce new measures to support consumption in critical sectors and among key consumer groups. The primary focus would be on promoting the property sector’s transition to a new development model.
Li Chao, chief economist at Zheshang Securities, predicted that the central bank would likely reduce the reserve requirement ratio in the third quarter and lower policy rates in the fourth quarter to further support economic growth.
On the fiscal front, China is set to accelerate the issuance and use of local government special bonds. Additionally, efforts will be made to ease burdens on enterprises and reduce taxes and fees to support industries experiencing mounting pressures.
The central bank also emphasized its commitment to supporting private enterprises. During a symposium with private enterprises, Pan Gongsheng, governor of the People’s Bank of China, pledged “all-out efforts” to boost the private economy. The bank will provide guidance on financial support for private real estate companies, help local governments address overdue payments to businesses, and expand the use of instruments to support bond financing of private enterprises.
China’s economic regulator is taking proactive steps to stabilize and strengthen the nation’s economy amid global uncertainties. The implementation of targeted reserve policies and various stimulus measures in the third quarter is expected to boost domestic demand, enhance private investment, and drive sustainable economic growth. As the country continues to navigate through challenges, the coordinated efforts of policymakers and financial institutions will play a crucial role in driving economic recovery and progress.