China vows to step up support for slowing economy, weak demand
Top leaders pledged to roll out a batch of new measures at an appropriate time
CHINA’S ruling Communist Party pledged to step up support for the economy, as a loss of momentum in recent months risks putting the nation’s annual growth target out of reach.
Top leaders pledged to roll out a batch of new measures at an appropriate time, without elaborating, at a meeting of the 24-member decision-making body led by President Xi Jinping, the official Xinhua News Agency reported. Officials also vowed to accelerate existing policies.
Insufficient domestic demand was highlighted as an area of concern, as the economy battles the negative impact of a changing external environment, according to the report. The meeting called for faster issuance and use of local government special bonds, a key source of funding for infrastructure projects.
China will “treat lifting consumption as the lever for expanding domestic demand, and the focus of economic policies needs to shift towards benefiting people’s livelihoods and promoting spending”, according to the statement, which threw a spotlight on services, tourism and elderly care.
The world’s second-largest economy recently saw growth unexpectedly slow to the worst pace in five quarters, as faltering consumer spending undermined an export boom. That has threatened Beijing’s goal of achieving about 5 per cent growth in gross domestic product this year, and triggered calls for more stimulus.
Since a twice-a-decade Communist Party meeting on long-term economic policy urged efforts to meet this year’s growth goal, the central bank has stepped in with a string of surprise interest-rate cuts, while the Finance Ministry allocated funds raised by special sovereign bonds to finance a cash-for-clunkers programme to stimulate consumption.
The Politburo’s July meeting is one of its three annual huddles to focus on the economy, and is closely watched for signals of policy shifts.
Parsing the language of such events is important as officials became less open to discussing policies with experts, and Xi’s consolidation of power means the economic decision-making process is increasingly opaque.
Ahead of the meeting, economists had called for the government to spend money faster. Fiscal expenditure in the first half of this year contracted almost 3 per cent from a year ago, likely weighing on economic activity. BLOOMBERG
Share with us your feedback on BT's products and services
