Global Times: Xi presides over top meeting to arrange for economic work

BEIJING, Sept. 28, 2024 /PRNewswire/ -- The Political Bureau of the Communist Party of China (CPC) Central Committee held a meeting on Thursday to analyze the current economic situation of China and make further plans for economic work. Xi Jinping, general secretary of the CPC Central Committee, presided over the meeting, the Xinhua News Agency reported.

While noting the fundamentals of the Chinese economy, and favorable conditions such as a vast market, strong economic resilience and great potential remain unchanged, the meeting emphasized it is necessary to take a comprehensive, objective, and calm view of the current economic situation, confront difficulties directly, and remain confident.

Following China's recent rollout of numerous policy measures aimed at boosting economic growth, the Thursday meeting further highlighted the country's determination to achieve annual development targets, providing further confidence in China's economic trajectory, and reinforce the intensity and effectiveness of these policies, economists said on Thursday.

The top meeting noted that the Chinese economy has posted a generally stable performance this year, making progress while maintaining stability. New quality productive forces have developed steadily, and solid efforts have been made to ensure people's livelihoods. Positive progress has also been achieved in preventing and defusing risks in major areas, according to Xinhua.

Notably, the meeting called for effectively implementing existing policies, stepping up efforts to roll out incremental policies, further tailoring policy measures to be more targeted and effective, and striving to meet this year's economic and social development goals.

Comprehensive, targeted efforts

"The economic policies discussed at the meeting are comprehensive and targeted, covering areas such as fiscal policy, monetary policy, real estate, and living standards. The policy intensity is significantly greater, demonstrating the country's resolve to boost economic growth," Xi Junyang, a professor at the Shanghai University of Finance and Economics, told the Global Times on Thursday.

Xi Junyang noted that the Chinese economy has maintained relatively favorable conditions, and the positive effects of various policy measures will further boost optimism for the growth prospects, despite some downward pressure.

In addition to an overall analysis of the Chinese economy, the meeting also emphasized policy measures in various critical areas. On macro-policies, the meeting called for efforts to strengthen counter-cyclical adjustments by leveraging fiscal and monetary policies, including lowering the reserve requirement ratio (RRR) and implementing significant interest rate cuts.

On Tuesday, Chinese officials rolled out a package of major policy measures to support the country's economy, the housing market and the stock market. Crucially, it was announced that China would cut the RRR - the amount of cash that banks are required to hold as reserves - by 0.5 percentage points in the near future, and RRR could be cut by another 0.25-0.5 percentage points within the year depending on the market liquidity situation. Additionally, the interest rate of seven-day reverse repos will be reduced from 1.7 percent to 1.5 percent.

Then on Wednesday, the People's Bank of China, the country's central bank, announced that it would cut the rate on 300 billion yuan ($54.7 billion) worth of one-year medium-term lending facility (MLF) loans to some financial institutions to 2 percent, from the previous 2.3 percent.

The policy measures have significantly boosted confidence, with markets responding positively to the announcements. Amid the strong policy signals, Chinese stocks closed significantly higher on Thursday, with the benchmark Shanghai Composite Index surging 3.61 percent to above the 3,000 level, while the Shenzhen Component Index rose by 4.44 percent.

"The meeting marked another momentous point in that following the meeting, policy intensity will be greatly strengthened, further boosting the growth trend," Tian Yun, a veteran economist based in Beijing, told the Global Times on Thursday. "It also provides a clear economic outlook for everyone."

The Political Bureau meeting also called for efforts in various key aspects to further boost the Chinese economy, including the real estate market, the capital market, and the support of enterprises.

In addressing the real estate market, efforts must be made to address public concerns, adjust housing purchase restrictions, and reduce existing mortgage interest rates, improve land, fiscal and taxation, financial and other policies, and promote the formation of a new model of real estate development, the meeting concluded.

The meeting also called for efforts to boost the capital market including actively guiding medium- and long-term funds into the market, and removing barriers for social security, insurance, and wealth management funds to enter the market.

It is necessary to support mergers and acquisitions and reorganizations of listed companies, steadily promote the reform of public funds, and study and introduce policies and measures to protect small and medium-sized investors, according to the Thursday meeting.

Also on Thursday, the Office of the Central Financial Commission and the China Securities Regulatory Commission jointly issued guidelines on guiding medium and long-term funds into the capital market in a bid to boost overall capital market.

The meeting also pointed out that efforts are needed to help enterprises to overcome difficulties, including the adoption of law for the promotion of private economy. It also urged to increase income for low- and middle-income groups, and cultivate new consumption formats. Greater efforts are also needed to attract and stabilize investment, including the rapid implementation of reforms, particularly in opening up the manufacturing sector to foreign investment.

Positive impact

"There are many measures for various aspects of economic and social development, and the focus on policy intensity is quite significant," Xi Junyang said. "All of these measures certainly have a positive impact on the economy."

With strong policy support and solid economic fundamentals, many Chinese economists said the country is on track to achieve its annual growth target of around 5 percent.

"With such policy intensity, I expect the fourth-quarter GDP growth rate will reach above 5 percent, which is crucial for achieving the annual growth target," Tian said. 

In addition to major economic measures, the Political Bureau meeting on Thursday also called for efforts to safeguard people's livelihoods, focusing on key groups such as new college graduates, migrant workers, and those newly lifted out of poverty.

Notably, on Wednesday, the CPC Central Committee and the State Council issued a 24-point guideline to implement an employment-first strategy aimed at improving job quality and achieving reasonable growth in employment numbers.