China’s CPC Leadership Unveils Measures to Bolster Economic Growth
In a decisive move to stabilize the world’s second-largest economy, Xi Jinping, general secretary of the Communist Party of China (CPC) Central Committee, presided over a meeting of the Political Bureau of the CPC Central Committee on Thursday. The meeting analyzed the current economic situation and mapped out strategies to promote sustained economic development.
The CPC leadership acknowledged that while China’s economic fundamentals remain strong—boasting a vast market, robust resilience, and significant potential—there are emerging challenges that require attention. The meeting emphasized the importance of taking a “comprehensive, objective, and calm” approach to these new situations, facing difficulties head-on while maintaining confidence.
Strengthening Fiscal and Monetary Policies
One of the key takeaways from the meeting was the commitment to enhancing counter-cyclical adjustments in fiscal and monetary policies. The leadership highlighted the necessity of issuing ultra-long special treasury bonds and local government special-purpose bonds to stimulate government investment. Additionally, there was a call to lower the reserve requirement ratio (RRR) and implement substantial interest rate cuts to inject liquidity into the market.
Earlier this week, the People’s Bank of China (PBOC) announced a series of monetary easing measures that surpassed market expectations. PBOC Governor Pan Gongsheng revealed plans to reduce the RRR by 0.5 percentage points in the near future, releasing approximately 1 trillion yuan (about $141.78 billion) into the financial system. Further reductions of up to 0.5 percentage points are anticipated within the year, potentially adding another 2 trillion yuan in liquidity.
Revitalizing the Property Market
Addressing the downturn in the property market, the CPC leadership stressed the need for proactive measures to stabilize the sector. Recent data showed declines in both new and second-hand home prices in large- and medium-sized cities across the Chinese mainland.
The meeting underscored the importance of regulating the increase in commercial housing construction, optimizing existing inventory, and improving quality. Financial support for “whitelist” projects was highlighted, with commercial banks having already approved over 5,700 such projects, amounting to financing of 1.43 trillion yuan and supporting the timely delivery of over 4 million housing units.
In response to public concerns, the leadership advocated for adjusting housing purchase restrictions, lowering interest rates on existing mortgage loans, and promptly refining land, fiscal, tax, and financial policies. The aim is to establish a new model for real estate development that aligns with current economic conditions.
The PBOC announced plans to lower mortgage rates on existing home loans to levels comparable to newly issued loans, with average reductions expected to be around 0.5 percentage points. This move is anticipated to benefit around 50 million households, reducing total interest expenses by approximately 150 billion yuan annually and stimulating consumption and investment.
Looking Ahead
Founder Securities, a leading Chinese financial services company, noted that the timing of the CPC meeting in September signals the leadership’s strong commitment to stabilizing growth and managing expectations. With the new measures, China aims to effectively implement existing policies, introduce targeted incremental policies, and strive to achieve this year’s economic and social development goals.
The meeting’s outcomes reflect a strategic approach to navigating economic challenges while leveraging China’s inherent strengths. By focusing on fiscal and monetary adjustments, revitalizing the property market, and addressing the concerns of the populace, the CPC leadership is setting the stage for sustained economic resilience and development.
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Key takeaways from CPC leadership's meeting on economic work
cgtn.com
