Why focus on these four aspects?, The State Council will study and promote a new batch of stable growth policies and measures for the economy | entity | batch
Introduction: The State Council emphasizes 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.
Since the second quarter, the problem of insufficient market demand and slowing endogenous economic recovery has become increasingly prominent, and the market is looking forward to more countercyclical adjustment policies.
According to Xinhua News Agency, Premier Li Qiang presided over an executive meeting of the State Council on June 16 to study a series of policy measures to promote sustained economic recovery and improvement.
The meeting pointed out that the overall economic operation of China is currently recovering and improving. With the introduction and implementation of early policy measures, market demand is gradually recovering, production and supply continue to increase, prices and employment are generally stable, and high-quality development is steadily advancing. At the same time, the external environment is becoming more complex and severe, and global trade and investment are slowing down, directly affecting the process of China's economic recovery.
In response to changes in the economic situation, the State Council emphasized the need to take more powerful measures 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.
Wang Qing, Chief Macro Analyst of Dongfang Jincheng, told First Financial that specific measures will be gradually released and implemented by relevant responsible departments, which may include the comprehensive use of various fiscal, financial, industrial, and employment policy tools, increasing countercyclical regulation efforts, and focusing on expanding consumption and investment demand.
In terms of increasing macroeconomic policy regulation, monetary policy has taken the lead in exerting force. On June 13 and June 15, the People's Bank of China successively lowered the open market 7-day reverse repurchase rate, standing lending facility rate, and medium-term lending facility rate by 10 basis points, releasing a signal of market stability confidence through interest rate cuts. With monetary policy regulation taking the lead, the market is also looking forward to stable growth measures in other related fields.
Li Chao, Chief Economist of Zhejiang Securities, believes that in the second half of the year, monetary policy will adopt a dual easing policy of both quantity and structure. It is expected that there will still be reserve requirement cuts and interest rate cuts, and structural policy tools will continue to exert force. For interest rate cuts, he predicts that the Federal Reserve may enter a cycle of interest rate cuts in the fourth quarter, and the fundamental and monetary policy differences between China and the United States will converge. China will have opportunities to improve its balance of payments and exchange rates, further opening up the space for monetary policy easing and forming expectations for interest rate cuts.
In terms of expanding effective demand, against the backdrop of low prices, there is a greater space and urgency for policies to promote consumption. The total retail sales of consumer goods in May increased by 12.7% year-on-year, a decrease of 5.7 percentage points from the previous month.
Meng Wei, spokesperson for the National Development and Reform Commission, stated on the 16th that efforts should be made to formulate and introduce policies to restore and expand consumption, continuously improve the consumption environment, and unleash the potential for service consumption; Stabilizing automobile consumption, accelerating the construction of charging stations, energy storage facilities, and supporting power grid renovation, and vigorously promoting the introduction of new energy vehicles to rural areas. Accelerate the implementation of 102 major projects in the 14th Five Year Plan, promote the construction of major infrastructure such as energy, water conservancy, and transportation, as well as new types of infrastructure, play the guiding role of government investment and policy incentives, and effectively stimulate the vitality of private investment.
At the regular press conference of the Ministry of Commerce on the 15th, spokesperson Shu Jueting also revealed the next steps and key tasks to promote consumption. She stated that the Ministry of Commerce will focus on continuing to improve consumption policies, organizing consumption activities, and innovating consumption scenarios. A series of consumer promotion activities will be launched during the upcoming summer shopping season.
In terms of strengthening and optimizing the real economy, the Ministry of Industry and Information Technology, the Ministry of Finance, and the People's Bank of China issued a notice on June 13 on the key work of cost reduction in 2023, aiming to reduce the burden on the real economy. The reduction of costs for real economy enterprises this time involves a wide range of aspects, including tax incentives, financial support, institutional transaction costs, labor costs, land and raw material costs, logistics costs, capital turnover, and 22 specific tasks.
Affected by the decline in profits of industrial enterprises, the growth rate of investment in the manufacturing industry has further declined. The investment in manufacturing increased by 6.0% year-on-year in the first five months, a decrease of 0.4 percentage points from the previous four months, and the growth rate has been continuously declining since October last year. Wang Qing stated that we need to increase the policy tilt towards manufacturing investment and enhance the resilience of manufacturing investment. This is a major foothold for strengthening and optimizing the real economy.
In terms of preventing and resolving risks in key areas, Wang Qing believes that the focus will include two areas: first, further increasing the support policies for the real estate industry. Under the tone of "housing is for living, not for speculation" and "implementing policies tailored to the city", we actively implement differentiated housing loan policies, continuously guide residents to lower housing loan interest rates, moderately relax loan and purchase restrictions, and increase support for housing provident fund purchases, promoting the trend of stabilization and recovery in the real estate market. The second is to effectively control the risk of local government debt. The key is to carry out debt replacement in an orderly manner, optimize the debt term structure, and reduce the interest burden for relevant regions and entities with high debt risk and high pressure to repay principal and interest.
With the implementation and effectiveness of stable growth policies, the momentum of economic recovery in the third quarter is expected to strengthen. Fu Linghui, spokesperson for the National Bureau of Statistics, pointed out that in the second half of the year, as the base increases, the economic operation will return to the normal growth level. Throughout the year, there are many favorable supports for the economy to achieve its expected development goals.
