Market expectations have improved, and multiple departments are brewing policy "combination punches" to promote the continued recovery of the economy towards positive policies

Beijing, August 4th - The Central Political Bureau meeting recently pointed out that the national economy has continued to recover and overall rebounded since the beginning of this year. Recently, in order to consolidate the positive momentum of economic recovery, relevant parties have actively deployed and taken frequent actions in expanding investment, promoting consumption, and stabilizing expectations. Which areas are currently the focus of promoting economic recovery and improvement? How can a series of policies work together to form a "combination punch" and accelerate their implementation and effectiveness? What other supportive economic policies have been released by various departments recently? On August 4th, the National Development and Reform Commission, the Ministry of Finance, the People's Bank of China, and the State Administration of Taxation held a press conference to introduce the situation of "effectively combining macroeconomic policies to promote high-quality economic development".

The current market expectations have improved, and all departments are working hard to implement various policies

Yuan Da, Deputy Secretary General of the National Development and Reform Commission and Director of the Comprehensive Department, stated that since the beginning of this year, the Commission, together with relevant parties, has increased its efforts in implementing macro policies, promoted coordinated efforts in policy advancement, and orderly implemented the "three batches". The system has played a "combination of punches", effectively addressing difficulties and challenges such as the increasing adverse effects of international environmental changes on China and the interweaving of domestic cyclical structural contradictions. This has effectively promoted the sustained recovery of the national economy and the overall recovery.

Specifically, the first is to continue and optimize a number of phased policies, such as clarifying the follow-up arrangements for phased policies that expire in March and April as early as possible, continuing to implement or as institutional arrangements for long-term implementation of multiple policies, and continuing and optimizing support policies such as the reduction and exemption of new energy vehicle purchase tax in June, further stabilizing expectations and enhancing confidence, creating a stable policy environment for enterprises to arrange investment and business activities. The second is to study and introduce a series of targeted new measures. In terms of improving supply quality, policies have been introduced to accelerate the development of advanced manufacturing clusters, promote high-quality development of new energy vehicles, and support financing for technology-based enterprises; In terms of expanding effective demand, measures have been taken to promote consumption of household electronic products, support new energy vehicles going to rural areas, accelerate the construction of charging infrastructure, and promote private investment; In terms of deepening reform and opening up, measures have been introduced to build a unified national market, promote the development and growth of the private economy, optimize the business environment, and promote stable scale and structure of foreign trade, continuously increasing quantity, stabilizing stock, and improving quality, stimulating and releasing the endogenous driving force of economic development.

"From the latest economic operation data currently available, the growth rate of physical quantity indicators has accelerated. In July, the national unified regulation power generation increased by 5.9% year-on-year, which is 1.5 percentage points faster than the previous month. Market expectations have also improved, and the manufacturing PMI has rebounded for two consecutive months," said Yuan Da.

He pointed out that in June, in response to the new changes in the economic operation in the second quarter, the Development and Reform Commission, together with relevant departments, timely launched a reserve policy to promote sustained economic recovery and improvement. At present, various departments are working hard to implement policies and measures, including guiding the downward trend of market interest rates, promoting the consumption of commodities such as automobiles, promoting the transformation of urban villages in mega cities and the construction of public infrastructure for both emergency and emergency use, and orderly expanding the issuance scale of real estate investment trust funds in the infrastructure sector. Other policies are also being promoted, providing strong policy support for sustained economic recovery.

More targeted reserve policies are brewing, and policy "combination punches" are being intensified to show effectiveness

Looking ahead to the second half of the year, Yuan Da stated that as the effects of various policies of "combination boxing" continue to emerge, the economy in the second half of the year will maintain a stable and positive trend on the basis of continuous recovery in the first half of the year.

It is reported that in the next step, the Development and Reform Commission will work with relevant parties to organize and implement the continuation of phased policies, continuously plan and study a batch of more targeted and stronger reserve policies, and timely introduce and implement them in batches according to changes in the situation.

This mainly includes six aspects: firstly, actively expanding domestic demand. Implement a series of policies to restore and expand consumption, promote bulk consumption such as automobiles, vigorously stimulate the vitality of private investment, and accelerate the promotion of 102 major projects in the 14th Five Year Plan and other major economic and social development projects. The second is to strengthen and optimize the real economy. Increase efforts to clean up outstanding accounts of enterprises, especially small and medium-sized enterprises, and strengthen financial and tax support for small and micro enterprises and individual businesses. The third is to promote high-level technological self-reliance and self-improvement. Strengthen the national strategic scientific and technological strength, strengthen the construction of innovation capabilities, give full play to the leading and supporting role of technology-based backbone enterprises, organize more enterprises to lead and participate in key core technology research and development, and promote the deep integration of innovation chain, industry chain, capital chain, talent chain. The fourth is to continuously deepen reform and opening up. Focusing on the key areas and key links that drive the whole body, we will increase our efforts in reform, accelerate the optimization and structural adjustment of the state-owned economy, promote the development and growth of the private economy, steadily expand institutional openness, and make greater efforts to attract and utilize foreign investment. The fifth is to effectively ensure the improvement of people's livelihoods. Efforts will be made to strengthen the employment of key groups such as college graduates, accelerate the filling of supply gaps in public services such as elderly care, childcare, education, and healthcare, and strengthen the social security network. Six is to prevent and resolve risks in key areas. Continue to implement phased policies to support the "guaranteed delivery of buildings" work and assist in the disposal of non-performing assets. At the same time, we will strengthen policy reserves in preventing and resolving internal and external risks and challenges, firmly guarding the bottom line of preventing systemic risks.

Wei Yan, Deputy Director of the Taxation Department of the Ministry of Finance, pointed out that in order to implement the decisions and deployments of the Party Central Committee and the State Council on promoting the development and growth of the private economy, it is necessary to further increase the tax and fee incentives for small and micro enterprises and individual businesses, reflect special support for small and micro enterprises and individual businesses, in order to boost enterprise confidence, stabilize market expectations, and continuously stimulate the vitality of business entities. On July 31st, the State Council executive meeting deployed and arranged 10 tax and fee preferential policies related to small and micro enterprises and individual businesses. Firstly, the four phased policies will be uniformly extended and implemented until the end of 2027, based on optimization, improvement, and increased support. The second is to continue implementing the other six phased policies until the end of 2027. Wei Yan stated that the implementation of relevant policies will truly support the recovery and development of small and micro enterprises and individual businesses, better boost confidence, and create a favorable environment for the development of the private economy.

Zou Lan, Director of the Monetary Policy Department of the People's Bank of China, stated that in the next stage, the People's Bank of China will conscientiously implement the deployment of the Central Political Bureau meeting, give full play to the dual functions of the total amount and structure of monetary policy, continue to implement existing tools, continue to implement the period for structural contradictions that are still prominent, and take multiple measures to consolidate policy effectiveness. If necessary, new tools can also be created to continuously support key areas and weak links such as inclusive finance and green low-carbon. One is to continue supporting inclusive finance. At present, the amount of loans and rediscounts for supporting agriculture and small businesses is abundant, and financial institutions can further increase it when needed. At the same time, we will continue to implement inclusive small and micro loan support tools until the end of 2024, maintain financial support for small and micro enterprises, and play an important role in stabilizing enterprises and ensuring employment. The second is to continue supporting green and low-carbon development. Parallel implementation of carbon emission reduction support tools and special re loans to support clean and efficient utilization of coal, incentivizing and guiding more financial institutions to support green and low-carbon development in a market-oriented manner. Thirdly, multiple measures are taken to support technological innovation. Consolidate the driving role of technology innovation refinancing policies, and further enhance the willingness and ability of financial institutions to serve technology-based enterprises. The fourth is to support the stable operation of the real estate market. Continue to implement the guaranteed housing loan support plan until the end of May 2024, while steadily promoting the implementation of the rental housing loan support plan in pilot cities.