Intensive release of signals from multiple departments to stabilize the economy and further expand the scope of private investment access. June 30th | Monetary Policy | Investment
To promote sustained economic recovery, multiple ministries have recently continued or introduced policies to stabilize the economy, releasing positive signals.
Recently, Zheng Zhajie, Director of the National Development and Reform Commission, wrote an article pointing out that the foundation for the sustained overall improvement of China's economic operation still needs to be consolidated. The article points out the need to accelerate the implementation of proactive fiscal policies and implement a precise and robust monetary policy. At the same time, it is necessary to promote the sustained recovery of consumption, continuously improve traditional consumption, accelerate the cultivation of new consumption, and continuously expand consumption hotspots. In addition, we will further expand the scope of private investment access, encourage and attract more private capital to participate in the construction of national major engineering projects and remedial projects.
The National Standing Committee held on June 16th proposed that in response to changes in the economic situation, more powerful measures must be taken to enhance development momentum, optimize economic structure, and promote sustained economic recovery and improvement. The meeting focused on four aspects: increasing macroeconomic policy regulation, focusing on expanding effective demand, strengthening and optimizing the real economy, and preventing and resolving risks in key areas. A series of policy measures were studied and proposed. The meeting emphasized that policy measures that meet the conditions should be timely introduced and implemented, while strengthening the reserve of policy measures to maximize the comprehensive effect of policies.
On June 26th, Minister of Finance Liu Kun stated at the third meeting of the Standing Committee of the 14th National People's Congress that the next step is to increase efficiency and implement proactive fiscal policies. Closely monitor the execution of local and departmental budgets, strengthen budget execution and centralized treasury collection and payment management, comprehensively improve the efficiency of fund payment, and quickly form physical workload. Improve tax and fee preferential policies, support the development of private enterprises, small and medium-sized enterprises, and individual businesses, promptly address prominent issues raised by business entities, continuously crack down on illegal fees charged by enterprises, and prevent arbitrary fees, fines, and assessments.
Liu Kun also pointed out that we should play a good role in guiding government investment, appropriately expand the investment of local government special bonds in various fields and use them as project capital, prepare well in the early stage of projects, improve the quality of project reserves, prioritize supporting mature and under construction projects, increase efforts in laying a foundation, promoting long-term development, filling gaps, and adjusting structures, prevent blind expansion of investment, and encourage and attract more private capital to participate.
Recently, the central bank has continuously lowered interest rates, and signals of policy strengthening have been actively released. On June 13th, the central bank lowered the 7-day reverse repurchase rate and the standing lending facility rate by 10 basis points each; On June 15th, the central bank launched a 237 billion yuan medium-term lending convenience operation, with an interest rate of 2.65%, a decrease of 10 basis points.
On June 30th, the second quarter meeting of the Monetary Policy Committee of the People's Bank of China specifically pointed out the need to increase macroeconomic policy regulation, implement a prudent monetary policy accurately and effectively, do a good job in cross cycle adjustment, and better play the dual functions of the total quantity and structure of monetary policy tools.
Ning Jizhe, member of the Standing Committee of the 14th National Committee of the Chinese People's Political Consultative Conference and Deputy Director of the Economic Committee, stated at the quarterly forum of the China Macroeconomic Forum at Renmin University of China that measures must be taken to consolidate the foundation of economic recovery and address issues in a targeted manner. We need to increase the intensity of macroeconomic regulation to prevent the occurrence of a spiral contraction of the economy. At the same time, we need to grasp the pace of macroeconomic regulation and introduce macroeconomic policies "sooner rather than later".
