Nation vows to ramp up stimulus policies to keep up strong momentum
China’s top economic planner, the National Development and Reform Commission (NDRC), announced a series of stimulus measures to further boost the economy as the country achieved a better-than-expected result of GDP growth of 5.3 percent in the first quarter, a reflection of the good start to the year and an indication of the stronger momentum ready to be unleashed.
Supportive efforts, including facilitating investment plans through the central budget and promoting additional treasury bond issuances, are part of the government work plan to consolidate growth for the rest of the year, according to officials.
While there are lingering challenges, mainly due to a complicated external environment, inadequate demand and weak social expectations for the economy, the country’s economic development in the long-run remains solid with steady progress being made, thanks to the supportive polices and consumption upgrade among other factors, officials and experts said, defying the West’s “Peak China’ rhetoric on the Chinese economy.
More supportive policies
Speaking at a press conference of the State Council Information Office on Wednesday, Liu Sushe, deputy head of the NDRC, vowed to implement a series of specific policy measures to shore up the economy.
The government will facilitate the trade-in action plan, implement ultra-long-term special treasury bonds and promote foreign investment while deepening comprehensive re
form and expanding high-level opening-up to the outside world, according to Liu.
Specifically, the government is speeding up the investment plans from within the central budget. This year, the central budget will allocate 700 billion yuan (($96.7 billion)) for investment. As of now, more than 200 billion yuan of these funds have been allocated, accounting for over 30 percent of the annual total, Liu said.
These remarks came as the nation just unveiled its GDP growth rate for the first three months, recording year-on-year growth of 5.3 percent, reaching 29.63 trillion yuan ($4.09 trillion), according to data released by the National Bureau of Statistics (NBS) on Tuesday, marking a good rebound and kicking off a good start to the year.
Experts noted the effect of government policy efforts in shoring up the economy have been reflected in the Q1 results, and they expected more supportive policies to be rolled out.
Positive macroeconomic policies such as combining relatively loose monetary policy with fiscal support have been a boost to the stable economy, said Cao Heping, an economist at Peking University, told the Global Times on Wednesday.
Li Chang’an, a professor at the Academy of China Open Economy Studies of the University of International Business and Economics, said that the government’s proactive efforts on rolling out more macroeconomic supportive policies are needed to ensure the robust growth continues.
Economic potential
Despite the positive economic performance in the first three months and the consistent government policies in place, some Western media and organizations are still hyping the “Peak China” rhetoric, claiming that the world’s second-largest economy has peaked in terms of economic growth and is slowing down.
For example, a recent report by US ratings agency Fitch said that it has revised the outlook on China’s Long-Term Foreign-Currency Issuer Default Rating to Negative from Stable.
The related rhetoric exhibits strong rigid thinking, Song Guoyou, deputy director of the Center for American Studies, Fudan University, told the Global Times, responding to the “Peak China” rhetoric, noting that China’s GDP growth rate in the first quarter stands out among major global economies, and achieving such data is not a coincidence but a continuation of a trend.
Meanwhile, China’s economic potentials are to be further unleashed as adjustments to the country’s economic structure is in place to achieve the transition to high-quality development.
Yuan Da, deputy secretary-general of the NDRC, said at Wednesday’s press conference that adjusting the economic structure is making progress, giving the example of the accelerated conversion of old and new driving forces.
One good example is the rapid development of the manufacturing industry, which saw a 6.7 percent growth year-on-year. In the sector, the added value of high-tech manufacturing increased by 7.5 percent, with the production in booming sectors such as 3D printing and service robots experiencing double-digit growth, injecting new impetus to economic development for the rest of the year.
Some leading international financial services companies have also lifted their projections for China’s economic growth in 2024 in response to the positive results in the first quarter.