(Economic Observation) China's strong and effective efforts to boost the economy have room for improvement
2024-10-09
The heavyweight policies in the financial and other fields announced by China before the National Day holiday are still fermenting. On the first working day after the holiday, Zheng Zhajie, Director of the National Development and Reform Commission, appeared at a press conference with four deputy directors to explain a package of incremental policies in detail with a rare "high-end" lineup. The continuous release of stock policy effects and the intensive implementation of incremental policies have sent a clear signal that China's efforts to boost the economy are powerful, effective, and have room for improvement. In recent discussions on China's economic policies, "exceeding expectations" is a high-frequency term that highlights the policy's strength. In terms of promoting the stabilization of the real estate market, measures such as reducing reserve requirement ratio and interest rates, lowering existing housing loan interest rates, unifying the minimum down payment ratio for housing loans, optimizing the policy of refinancing affordable housing, and supporting the acquisition of existing land by real estate companies have been described by observers as a "five pronged approach". The market is generally optimistic that it will have a positive impact on China's macro economy and real estate market, which will help stabilize economic growth expectations and boost market confidence. At the press conference on the 8th, the National Development and Reform Commission also repeatedly mentioned the need to "exert efforts" to ensure necessary fiscal expenditures, accelerate expenditure progress, and increase positive promotion of economic development; We need to increase support for local governments to carry out debt swaps and resolve debt risks; We need to lower the reserve requirement ratio and implement effective interest rate cuts. From this point of view, in response to the downward pressure in the economic operation, China will strengthen the counter cyclical adjustment of its macro policies, and all aspects will continue to exert more awesome. As policies in various fields gradually form a synergy, positive effects are emerging. The "two new" (large-scale equipment updates and trade in of consumer goods) is a prominent example. Under the protection of hundreds of billions of yuan (RMB, the same below), this policy has driven a significant increase in sales of key consumer goods such as automobiles, home appliances, and home decoration in China in recent times. In August, the retail sales of passenger cars in China increased by 10.8% month on month, with a strong 17% increase in the retail sales of new energy vehicles. It is expected that in September, the retail sales of passenger cars by major manufacturers will increase by 10% compared to the previous month. It is worth mentioning that in the key areas of equipment updates such as transportation and communication, in August, the added value of manufacturing industries such as ships and related equipment, urban rail transit equipment, and communication equipment increased by 23%, 17.1%, and 10.3% year-on-year, respectively; The production of household washing machines, smart TVs, household refrigerators and other products has also achieved rapid growth. This means that the relevant policy effects are being transmitted to the supply sector, promoting industrial development. Effectively implementing existing policies and intensifying the introduction of incremental policies are visible to the market. The latest released Purchasing Managers' Index (PMI) for China's manufacturing industry has rebounded rapidly, the stock market has rebounded and risen, and the market consumption during the National Day holiday is strong, all reflecting that expectations are improving. China's macroeconomic policies have always emphasized the organic combination of countercyclical and cross cyclical adjustments, which also means that the current package of incremental policies is sustainable, not a "short-term stimulus", and there is still room for future development. As the People's Bank of China previously announced the creation of two structural monetary policy tools to support the stable development of the capital market, it was clearly stated that if the first phase is used well, there can be a second and third phase, and there are clearly "follow-up" tools left in the toolbox. For example, considering that issuing a project list and investment plan in advance can help accelerate the preliminary work of the project and start implementation in advance, the National Development and Reform Commission plans to issue a list of 100 billion yuan "dual" construction projects (national major strategic implementation and key area security capacity building) and a 100 billion yuan central budget investment plan in advance according to procedures by the end of this month. This reflects that policy arrangements are both focused on the present and long-term, and have prepared "advance measures". To implement a package of incremental policies, the Chinese government has made it clear that they need to accelerate the pace of introduction and implementation. Policies with relatively mature conditions should be introduced immediately, and policies that need to be further refined and improved should be done well in related work and introduced one batch after another. Efforts will be made to achieve the annual economic and social development goals and tasks, and to solve prominent problems in economic operation. This set of powerful, coordinated, and strategic "combination punches" will play an important role. (New Society)
Edit：Zhou Chi Responsible editor：Wang Enbo
Source：CNS.cn
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