China steps up measures to strengthen the economy
What’s new: China’s State Council pledged to further expand the use of policy and development financial tools to improve market liquidity and encourage spending to prop up the slowing economy.
The cabinet on Thursday pledged to speed up the implementation of measures to strengthen the economy and put into practice as many detailed programs as possible in the first half of September to solidify the basis for economic recovery.
The cabinet called for full use of 300 billion yuan ($43.7 billion) of policy and development financial instruments announced last week to provide liquidity for qualifying projects and companies. It also said it would expand the scope of sectors eligible for support from such instruments to include urban rehabilitation, road construction and other projects, and attract more private capital to participate.
The context: China’s cabinet has repeatedly pledged a number of measures to support the economy in recent weeks.
Last week the cabinet issued 19 guidelines hoping to create synergies with measures already in place to stabilize the economy. The new policy package includes 300 billion yuan quotas for policy and development financial instruments, 200 billion yuan quotas for bond issuance for state-owned power generation companies, and 10 billion yuan agricultural subsidies.
China’s economic recovery remains fragile as ongoing virus-control restrictions disrupt businesses and the deepening housing crisis weighs on market sentiment. In a cabinet meeting earlier this week, Premier Li Keqiang said China had rolled out “stronger” Economic policy this year than in 2020, when he warned that the country faces a difficult task to ensure economic recovery.
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Contact reporter Han Wei ([email protected]) and editor Bob Simison ([email protected])
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