Policy Boost Window Open, Economic Observation | Economic Operation Arrives at Midyear Time | Policy | Economy

Economic observation

The original economy has reached the midpoint of the year, and the window for policy acceleration has opened

Worker's Daily - Beijing Mengyuan, a journalist from Zhonggong Network

The recently held executive meeting of the State Council pointed out 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. Recently, multiple departments have taken intensive actions, and a new round of stable growth policies have been successively introduced, conveying a clear signal of intensified macroeconomic policies.

In the field of consumption, it was announced at the regular press conference of the Ministry of Commerce held on July 6th that the Ministry, together with relevant departments, has drafted a policy document to promote home consumption, proposing specific measures to improve supply quality, innovate consumption scenarios, improve consumption conditions, and optimize the consumption environment. The document will be issued soon. Home consumption involves multiple fields, with a long upstream and downstream chain and a large scale. Market analysis suggests that taking targeted measures to boost it will be beneficial for driving consumer growth and economic recovery.

In the field of investment, on July 7, the National Development and Reform Commission organized the launch meeting of the pilot cooperation mechanism of investment and loan linkage. The fixed assets investment Department of the National Development and Reform Commission, the National Information Center and the relevant business departments of seven banks jointly signed the framework agreement of the pilot cooperation mechanism of investment and loan linkage. It is reported that this pilot cooperation mechanism will promote the joint efforts of government policy support and bank financing services through the interconnection and sharing of investment online platforms and bank credit systems, and help promote private investment and expand effective investment.

Previously, the Ministry of Finance and the People's Bank of China have also made statements. At the third meeting of the Standing Committee of the 14th National People's Congress on June 26th, Minister of Finance Liu Kun stated that the next step will be to increase efficiency and implement proactive fiscal policies. On June 30th, the second quarter meeting of the Monetary Policy Committee of the People's Bank of China proposed to increase the intensity of 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.

At a critical point in the economic operation towards the middle of the year, the coordinated efforts of fiscal policy, monetary policy, industrial policy, etc. indicate that the window for policy acceleration is opening.

In the first half of this year, with the coordinated efforts of macroeconomic policies, China's economic development showed a rebound and positive trend, and the triple pressures of demand contraction, supply shock, and weakened expectations were alleviated. However, it should also be noted that the current economic recovery foundation is not yet stable, and the sustained recovery of demand is still constrained. Structural differentiation in different industries and sectors is still ongoing. In this context, the expectations of various sectors for policies are increasingly heating up, and the necessity and urgency of policy escalation are further highlighted.

From the recent policies introduced, expanding demand remains the focus of policy efforts. Restoring and expanding demand is the key to the sustained recovery and improvement of the current economy, and this policy has long been clear. However, looking back at the demand side in the first half of the year, the recovery and development showed differentiation and imbalance: service consumption rebounded rapidly, but the potential for commodity consumption, especially bulk consumption, still needs to be unleashed; Key projects are advancing rapidly, but private investment needs to be further boosted. From this, we can see that recent measures have focused on promoting key consumption areas such as automobiles, household appliances, and housing, aiming to drive and expand private investment, and have proposed a series of new measures.

As some comments have pointed out, the effectiveness of macro policies ultimately depends on the perception of micro entities. Since the beginning of this year, various regions and departments have continued to make efforts to help enterprises recover their vitality and boost the confidence of business entities. However, the transmission and implementation of policies still need to be further improved. Experts have stated that the Chinese economy in the first half of the year showed a "macro hot, micro cold" characteristic.

In this regard, the new round of stable growth policies not only sends a signal of strengthening, but also sends a signal of improving micro level and supporting enterprise development. For example, the National Development and Reform Commission and four other departments recently jointly issued a notice on doing a good job in the key work of cost reduction in 2023, deploying the key work of cost reduction this year and proposing a series of practical measures to help business entities alleviate difficulties and recover their vitality as soon as possible. Some analysts believe that the next stage of policies will further combine the effectiveness of policies with stimulating the vitality of business entities, promote micro level improvement, enhance the sense of policy achievement, and solidify the foundation of economic operation.