China is ‘fully confident’ of achieving economic, social goals in 2024 | World News
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In an effort to reverse the economic downturn, China unveiled in late September its most aggressive monetary stimulus package since the COVID-19 pandemic | (Photo: Shutterstock)
China is “fully confident” of achieving its full-year economic and social development targets, with some funds from 2025’s budget being brought forward to support projects, chairman of the country’s economic planner Zheng Shanjie said on Tuesday.
China stocks blasted to two-year highs after a slew of stimulus steps announced in recent weeks supported sentiment in early trade, but later retreated. Hong Kong shares also slid as investors walked back some of the stimulus excitement.
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Zheng, chairman of the National Development and Reform Commission (NDRC), told a press conference China’s economy remains largely stable but is facing more complex internal and external environments.
“The international market is volatile, global trade protectionism has intensified, and uncertain and unstable factors have increased. These will have an adverse impact on my country through trade, investment, finance and other channels,” Zheng said.
Downward pressure on the domestic economy has increased, he added.
To support local governments, China will issue 100 billion yuan ($14.12 billion) from next year’s central government budget and another 100 billion yuan for key investment projects by the end of this year, Zheng said.
The country will also quicken fiscal spending and “all sides should keep making efforts more forcefully” to strengthen macroeconomic policies, he added.
Investors and economists expect more policy support on the fiscal side to sustain the market’s optimism. They said it will take time to restore consumer and business confidence and get the economy back on more solid footing. A housing market recovery, in particular, could be a long slog.
“We anticipate that the government will arrange 1-3 trillion yuan of additional fiscal support this year and next to boost the real economy, recapitalise banks, and stabilise the property market,” said Yue Su, principal China economist at the Economist Intelligence Unit.
“This, along with investments from special long-term bonds planned for next year, is expected to primarily impact 2025’s economic growth.”
The government set a growth target of around 5 per cent this year, but economic indicators showed growth momentum waned since the second quarter, weighing on households spending and business sentiment amid a severe property downturn.
A private report by recruiting platform Zhaopin showed on Tuesday that average pay offered by recruiters in China’s 38 major cities fell 2.5 per cent in the third quarter from the second, and down 0.6 per cent from a year earlier.
In an effort to reverse the economic downturn, China unveiled in late September its most aggressive monetary stimulus package since the COVID-19 pandemic, coupled with extensive property market support.
Zheng said that to address insufficient domestic demand, policymakers will focus on enhancing people’s livelihood to stimulate consumption and investment, such as supporting disadvantaged people, consumer goods trade-ins, elderly care and births. No further details were announced.
Vice Chairman of the NDRC, Liu Sushe, stated that most of the 6 trillion yuan in government investment this year was allocated to specific projects, with 90 per cent of local government special bonds used for project construction issued by September.
At the same press conference, another vice chairman of the NDRC, Zhao Chenxin, said that China’s economic growth remained “generally stable” over the first three quarters.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
First Published: Oct 08 2024 | 11:28 AM IST
