China's economic recovery becomes more robust with support of policy package

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 opinion and not necessarily the views of CGTN.

China's economy has shown a positive growth momentum recently, driven by a series of policies. The accelerated launch of a package of incremental policies has not only boosted market confidence and improved expectations, but has also significantly enhanced market vitality. These policies include more proactive fiscal and monetary policies, as well as special support policies for the real estate sector, capital markets, and the real economy. The intensive policies have not only provided a clear direction for the market, but also effectively reduced the operating costs of enterprises and enhanced the vitality of market entities through specific measures such as tax and fee reductions, increase of credit supply, and optimization of the business environment.

The policy effect is gradually emerging, firstly reflected in the improvement of market expectations. Previously, due to multiple factors, market confidence was low, corporate investment willingness was not strong, and consumer spending also tended to be cautious. However, with the implementation of the policies, market confidence has gradually recovered. As an important indicator reflecting economic activities in the manufacturing sector, the purchasing managers index (PMI) is showing positive changes. At the end of September, China's manufacturing PMI was 49.8, up 0.7 percentage point from August, far exceeding market expectations. In October, the manufacturing PMI came in at 50.1, increasing for two consecutive months and recovering back to the expansionary territory.

Driven by these policies, positive changes have also occurred in key areas such as the real estate sector, the stock market, and the RMB exchange rate.

In terms of the real estate market, with the introduction of a series of government policies, the sector has gradually stabilized. Housing prices in some cities have rebounded and the transaction volume has also increased. The policy support has not only helped alleviate the financial pressure of real estate enterprises, but also drived the development of related industrial chains and provided new impetus for economic growth.

In terms of the stock market, influenced by favorable policies, the overall performance of the A-share market has been robust. As of the closing on October 28, the Shanghai Composite Index stood firmly above 3,300 points. At the same time, with the continuous inflow of foreign capital, the internationalization of the A-share market has also continuously improved. This has laid a solid foundation for the long-term development of the market. The robust performance of the stock market will not only boost investor confidence, but also help attract more capital inflows, providing more financial support for the real economy.

In terms of the RMB exchange rate, thanks to the policies, it has remained basically stable at a reasonable and balanced level. This is conducive to maintaining the stability of the financial market, reducing the exchange rate risk of enterprises, and enhancing the international competitiveness of China's economy. With the stability of the RMB exchange rate, the competitiveness of Chinese enterprises in the international market will be further enhanced. This will help promote the growth of exports and the recovery of the country's economy.

With the continuous implementation of policies and the gradual release of their effects, China's economy is expected to achieve more robust growth. On the one hand, the government will continue to strengthen policy efforts and optimize policy mix to ensure that the policies can accurately and effectively promote the real economy. On the other hand, enterprises will actively adapt to the policy changes, strengthen internal management, and enhance innovation capabilities to better cope with market challenges and seize development opportunities.

With the support of these policies, China's economy is expected to continue to maintain a stable and positive trend in the fourth quarter. From the perspective of industrial production, with the improvement of enterprise efficiency and the expansion of market demand, industrial production is expected to continue to maintain steady growth. From the perspective of consumption, with the increase in residents' income and the improvement of consumer confidence, the consumer market is expected to further expand. From the perspective of investment, with the increase of government investment and the activity of private investors, it is expected to become an important force to promote economic growth.

The recent policy effects has provided strong support for the stabilization and improvement of China's economy. In the future, with the continuous implementation of the policies and the gradual release of their effects, the country's economy is expected to achieve more robust growth. At the same time, we also need to keep a clear mind, strengthen risk prevention and control to ensure stable economic operation. Only by doing this can we continuously promote the high-quality development of China's economy in the new era.