China to boost effective demand for stronger economic recovery

Citizens visit Qianmen Street, a landmark commercial street in Beijing, capital of China, July 6, 2022. (Xinhua/Li Xin)

BEIJING, July 22 (Xinhua) -- China will adopt policy measures to expand effective demand to strengthen the driving force for economic recovery and growth, according to the decision made at the State Council's Executive Meeting chaired by Premier Li Keqiang on Thursday.

The meeting noted that China's economy is at a crucial stage of stabilization and recovery and that the third quarter is of vital importance. It is essential to efficiently coordinate COVID-19 response with economic and social development, and further deliver the policy package for stabilizing the economy.

Efforts will be intensified to consolidate the foundation of economic recovery, stabilize overall economic performance and keep major economic indicators within a proper range, with priority given to job security and price stability.

There is still ample room for bringing out the effects of the policy-backed and development-oriented financial instruments and special-purpose bonds. These measures will help catalyze a large amount of private investment and should be better harnessed based on market principles.

Effective investment must be fully utilized to strengthen weak links, facilitate structural adjustments, spur consumption and create jobs, so as to leverage its key role in economic recovery and growth.

"The policy-backed and development-oriented financial instruments should help generate physical gains as quickly as possible, and catalyze lending from commercial banks," Li said.

The meeting decided to establish a coordination mechanism on effective investment for major projects, with joint administration and parallel review by the competent departments to ensure consistency and efficiency.

The selected projects should deliver both immediate and long-term benefits, help strengthen the fundamental underpinning for economic and social development, fall within the scope of the 14th Five-Year Plan and other plans, generate economic returns and get started as quickly as possible.

The quotas on land use and energy consumption for major projects will be set separately in accordance with related regulations. The development of competitive industries will still be fully market-based.

The funds of policy-backed and development-oriented financial instruments will be well used in accordance with laws and regulations. Greater incentives will be provided and funds will not be simply divided among localities. Localities that have more mature projects will receive greater support.

The meeting urged expediting the use of special-purpose bonds and guiding commercial banks toward supportive financing. The newly-added credit line of policy banks should be delivered in a timely manner.

All localities need to see to it that projects are advanced at a faster pace and meet quality requirements. Conditions will be created to ensure that operations at construction sites are not suspended and related industrial and supply chains stay uninterrupted, to generate more physical gains in the third quarter. More job opportunities will be provided for migrant workers through public works programs wherever possible.

Inter-agency working groups will be sent to localities in due time to supervise and facilitate project delivery. Management and audit will be strengthened to ensure project quality and forestall corruption and rent-seeking.

"During project implementation, pro-consumption measures and work relief schemes should be used whenever and wherever possible," Li said.

The meeting noted that consumption is closely related to people's lives and should still serve as a major engine for growth.

Financial institutions will be supported in offering more flexible arrangements for the personal consumer loans affected by COVID-19. City-specific policies will be adopted to promote steady and sound development of the real estate sector. People's basic housing needs will be met and their wish to improve housing conditions will be supported as appropriate.

Specific measures will be introduced for the sound and well-regulated development of the platform economy, to guide platform companies toward inclusive financial services in keeping with laws and regulations.

The role of the platform economy in creating jobs and spurring consumption will be better brought out. Financial support for import and export will be increased, and services such as exchange rate hedging will be offered to enterprises in an active manner.