Timely, targeted policy support to stabilize growth
Given the downward pressure on the economy and the mounting difficulties facing many market entities at the moment, as a result of the latest wave of the novel coronavirus as well as the increasingly complicated external environment, the policy support announced by the State Council is both timely and necessary.
Retail sales, a main gauge of consumption, fell 11.1 percent year-on-year in April, while the surveyed urban jobless rate rose to 6.1 percent, the highest reading since February 2020, according to the National Bureau of Statistics last week. All this makes achieving this year’s targeted GDP growth of around 5.5 percent a challenging task.
Yet the government still has many policy tools it can employ to address the challenges — as reflected in the latest batch of support measures it has unveiled — mainly thanks to its long-held stance of refraining from using excessive money supply and mass stimulus to promote growth over the past few years. This has left room for targeted measures to be adopted at this critical time to promote economic and social development.
In all, a package of 33 measures was released at the recent executive meeting of China’s Cabinet chaired by Premier Li Keqiang, mainly fiscal and related policies to keep the operation of market entities and employment stable, along with measures to stabilize industry and supply chains, keep logistics running smoothly and boost consumer spending. Li stressed that the policy measures should be swiftly rolled out wherever needed, in order to keep major economic indicators within the appropriate range and ensure stable overall economic performance.
“All localities and departments must have a stronger sense of urgency and work earnestly to ensure policy implementation,” he said. The State Council will conduct accountability inspections on local governments’ execution of policy measures to ensure they are fully implemented and tailored to the actual local situation.
The latest policy is designed and introduced from the perspective of responding to the current downward pressure on the economy. More policy support is in the pipeline to respond to any new changes in the economic landscape, if necessary.
But it should be recognized that the difficulties that the economy now faces are temporary, and the fundamentals sustaining the country’s steady and long-term economic growth remain unchanged. With the COVID-19 outbreaks in places such as Shanghai and Jilin province having been basically contained, and work and production gradually being resumed in an orderly way, there are enough reasons for people to have confidence that the performance of the Chinese economy will pick up in the months to come.