China introduces policy package to promote economic growth

Editor's note: Liu Chunsheng, a special commentator on current affairs for CGTN, is an associate professor at the Beijing-based Central University of Finance and Economics. The article reflects the author's opinions and not necessarily the views of CGTN.

At a press conference October 8, Zheng Shanjie, head of the National Development and Reform Commission, provided a detailed introduction of the specific measures to systematically implement a package of incremental policies. These policies aim to solidly promote China's economic growth, improve its economic structure and maintain a positive development trend. Against the backdrop of the current complex and volatile global economic situation, the introduction of these policies will undoubtedly provide significant support for the country's economy to achieve the annual growth rate target of five percent.

Major aspects of the package of incremental policies that China has vigorously promoted this time mainly include: more forcefully and effectively implementing macro policies, further expanding domestic demand, intensifying assistance to enterprises, stabilizing the real estate market and striving to boost the capital market. These policies cover multiple areas of macroeconomic regulation and control and also focus on stimulating market vitality through structural reforms and institutional innovations.

The policies focus on areas closely related to people's livelihoods. By increasing support for specific groups, such as providing one-time living subsidies to those in extreme poverty and orphans, and increasing the national student loan limits for undergraduate and graduate students, the livelihood and welfare of low- and middle-income groups will be directly improved.

The government has combined policies for large-scale equipment upgrades and consumer goods trade-ins to continuously expand the consumption of bulk commodities. This has not only helped unleash demand potential but also promoted energy conservation, carbon reduction and comprehensive green transformation. Data shows that passenger car retail sales have rebounded significantly, and home appliance sales have turned from a decrease to an increase, directly reflecting the driving effect of policies on consumption.

Furthermore, the policies have emphasized expanding consumption in areas such as elderly care and childcare services, and addressing the widespread concern over "the elderly and the young" issues. By supporting and regulating the development of elderly care and childcare industries by social forces, improving the fertility support policy system and enhancing the level of basic fertility and children's medical public services, the potential for service consumption can be further unleashed, fostering new consumption formats such as digital consumption and green consumption.

To boost market confidence, the policies have been optimized in multiple areas. By regulating law enforcement and behaviors related to enterprises, administrative interventions and burdens on enterprises have been reduced. For example, adopting inclusive and prudent supervision and flexible law enforcement methods to avoid issues such as irregular cross-jurisdictional law enforcement and profit-driven law enforcement have created a fairer and more transparent business environment for enterprises. The subsequent arrangements for phased policies have been clarified in advance to ensure policy continuity and stability. For policies such as tax and fee support and unemployment insurance to stabilize employment, relevant departments will accelerate research and assessment to clarify whether to continue their implementation. This will stabilize enterprise expectations.

The policies will further reduce enterprise financing costs and enhance business confidence by strengthening the guarantee of factor allocation, such as expanding the policy of no-principal repayment loans from small and micro enterprises to medium-sized enterprises on a phased basis and establishing a coordination mechanism to support financing for small and micro enterprises.

The policies have intensified counter-cyclical adjustments to macro policies. By strengthening the coordination and integration of macro policies such as fiscal and taxation, monetary and finance, investment and consumption, and income distribution, the combined effects of the policies will be amplified. For example, policies such as reducing required reserve ratios and implementing forceful interest rate cuts have created a better financial environment for the financing and investment of business entities. Introduction of major reform measures will be accelerated, such as formulating guidelines for building a unified national market and issuing a new version of the negative list for market access, to promote development through reform and stimulate market vitality.

To stabilize market expectations, the policies also focus on expanding effective investment by optimizing the investment structure. Various funds for this year have been fully utilized, and the issuance and use of local government special bonds are accelerating to support the commencement of projects. Partial lists of major construction projects and central budget investment plans for next year are being planned and issued in advance to ensure the continuity and stability of investment projects. Data shows that the current 700 billion yuan ($99 billion) of central budget investment has all been issued.

In response to the fluctuations in the real estate market and capital market, targeted measures have also been taken. China will increase the lending of "white list" projects, use special bonds to support the revitalization of idle land stocks and adjust housing purchase restriction policies. These measures will help release rigid housing demand and needs for improved housing, accelerate the digestion of stock commercial housing and reduce stock mortgage interest rates. In the capital market, the government will take powerful and comprehensive measures to vigorously guide medium- and long-term funds into the market, unblock the bottlenecks for social security, insurance, financial products and other funds to enter the market, and support mergers and acquisitions of listed companies. These measures will help boost market confidence and stabilize market expectations.