The Bund in Shanghai, east China, September 28, 2024. /CFP
A press conference held by the State Council Information Office on Tuesday gained attention domestically and internationally. Zheng Shanjie, head of the National Development and Reform Commission (NDRC), emphasized the need for a comprehensive and systematic implementation of policies during the press conference. He stressed that the approach must be more targeted and precise to enhance both the effectiveness and sustainability of these measures.
Experts indicated that the conference sent a clear signal, highlighting China's commitment and extensive policy toolkit to bolster economic development.
"The current set of incremental policies is not a short-term stimulus but rather a sustainable, long-term approach, said Huang Hanquan, head of the Chinese Academy of Macroeconomic Research affiliated to the National Development and Reform Commission, during a recent interview with CMG. He explained that China's macroeconomic policy consistently focuses on balancing countercyclical and cross-cyclical adjustments to ensure steady growth.
Over the past two months, China's economy has generally maintained stable progress, though some key indicators have shown signs of marginal weakening, Huang noted. He said the government's introduction of specific policy measures at this time reflects a determination to address these challenges and drive sustainable growth.
These measures also underscore that China retains ample policy space to navigate future uncertainties, he added.
Visitors at the open-air shopping plaza in Shenyang, northeast China's Liaoning Province, Octobrer 7, 2024. /CFP
China's gross domestic product (GDP) grew by 5 percent year-on-year in the first half of 2024, according to data from the National Bureau of Statistics (NBS), reflecting a stable economic foundation.
To further stimulate domestic demand and strengthen the economy, China introduced an action plan in March to implement a large-scale equipment upgrade and consumer goods trade-in program. This initiative was reinforced in July with an additional injection of 300 billion yuan (approximately $42.81 billion) through ultra-long special treasury bonds.
These measures aim not only to stimulate short-term consumption but also to provide structural guidance for transitioning the economy toward a greener, low-carbon future. The National Development and Reform Commission emphasized that the incremental policy measures are designed with long-term development in mind, addressing not just immediate economic challenges and this year's growth targets but also ensuring sustainable progress for the future.
The People's Bank of China in Beijing, September 24, 2024. /CFP
Experts have also weighed in on the recent policy adjustments, emphasizing their strategic significance. Dong Yu, executive vice president of the China Institute for Development Planning at Tsinghua University, noted that China has been continuously assessing and planning around the economic situation.
In September, China ramped up its policy efforts with targeted stimulus measures to strengthen economic performance. These included substantial interest rate cuts and initiatives to stabilize the property market. The government also introduced a set of guidelines aimed at promoting high-quality and sufficient employment, emphasizing the need for fair wage growth and expanding social insurance coverage.
The financial sector was prioritized in the recent policy measures because the key to addressing economic challenges lies in identifying the main issue, which is currently insufficient demand, according to Dong.
"To tackle this, we must recognize that the economy is a chain of interconnected sectors," he explained. "Resolving these challenges requires a coordinated set of policies, and the financial sector's moves are a crucial first step in this process."
Dong further noted, "Compared to other sectors, the financial sector has a stronger transmission mechanism. This enables it to take the lead, using feedback from the capital markets to restore confidence and drive recovery across other sectors."
According to Dong, the timing, scale and impact of this round of macroeconomic policies are especially noteworthy, marking one of the most significant adjustments in recent years. Looking forward, further exploration is needed to refine macroeconomic guidance and foster future growth.