Zheng Shanjie, chairman of China’s National Development and Reform Commission, announced a series of measures to support the country’s economy in a press conference. Although he did not unveil any major new stimulus plans, he stated that China would accelerate the issuance of special purpose bonds to local governments to aid in regional economic growth. Zheng also mentioned that ultra-long special sovereign bonds totaling 1 trillion yuan have been utilized to fund local projects, with plans to continue issuing these bonds next year. Additionally, the central government will release a 100 billion yuan investment plan earlier than scheduled, with more measures to support the property market and boost domestic spending on the way.
The press briefing with Zheng and four other key officials of the economic planning agency occurred as mainland Chinese markets resumed trading after Golden Week, resulting in a sharp increase in stock prices. In the weeks leading up to this, Chinese authorities had emphasized the need to bolster fiscal and monetary policy support to address economic challenges, particularly in response to a slowing growth rate and a prolonged property slump. Despite meeting the central government’s growth target in the first half of the year, China experienced lower-than-expected GDP growth in the April-June quarter, along with a rise in consumer prices and a contraction in factory activity in September. These economic indicators underscored the need for ongoing policy adjustments and support measures.
Zheng had previously emphasized the importance of strengthening macroeconomic policies in March, focusing on coordination across multiple aspects such as fiscal, monetary, employment, industrial, and regional policies. He acknowledged the existence of challenges and issues in achieving China’s growth targets, highlighting the ongoing complexity of the country’s economic landscape. In response to this, China has implemented various stimulus measures and policy initiatives to stimulate growth, address weaknesses in the property market, and boost domestic demand.
This renewed focus on economic policy and support measures has been driven by China’s efforts to counter a slow recovery from Covid-19 lockdowns, lackluster domestic demand, and a challenging property market environment. Chinese leaders have shown a sense of urgency in confronting these economic challenges, reflected in the recent wave of stimulus measures and policy adjustments. The government’s commitment to issuing special purpose bonds and implementing investment plans underscores its determination to strengthen the economy and maintain a growth trajectory in the face of external pressures and internal constraints.
As China continues to navigate its economic recovery and growth path, the effectiveness of these policy measures and their impact on key economic indicators will be closely monitored by investors and analysts. The country’s ability to sustain growth momentum, address structural issues in the economy, and navigate global uncertainties will remain key priorities for policymakers and economic planners. Zheng’s assurances of further support measures and reforms signal a proactive approach to addressing economic challenges and fostering sustainable growth in the coming months.
