China's top leadership vows to step up macro policies, expand consumption

Mysteel: China has vowed to step up macro policies and stabilise market confidence to ensure that leadership's full-year economic growth goal is achieved as the economy faces increasing negative factors from the outside world and insufficient demand at home.

The Politburo, the top decision-making body of China's Communist Party, held a meeting on 30 July to study the economic situation, deploy economic work for the second half of the year, with Chinese President Xi Jinping presiding over the meeting, reported the official Xinhua News Agency.

The changes in the external environment brought about increasing negative factors, domestic effective demand remains insufficient, divergences exist in the current economic operations, there are still many hidden risks in key areas and there are pains during the shift between old and new economic driving forces, it said.

China should continue to step up its economic policy, strengthen the counter-cyclical adjustment, implement proactive fiscal policy and prudent monetary policy, accelerate the full implementation of the policy initiatives already introduced and reserve and launch a batch of incremental policy initiatives as soon as possible, it said.

Issuance and use of local government special purpose bonds should be accelerated and ultra-long special treasury bonds should be well used to support the building of security capacity in major national strategies and key areas, and greater efforts should be made to promote the large-scale equipment renewal and the trade-in of consumer goods, it said.

China will cultivate and grow new industries and future industries, vigorously promote high-level scientific and technological self-reliance, strengthen breakthroughs in core technologies, and promote transformation and upgrading of traditional industries, it said.

The meeting stressed that it is necessary to focus on boosting consumption to expand domestic demand and said policies should increase residents' income "through multiple channels" and enhance the "ability and willingness" of low- and middle-income groups to spend.

It called for measures to improve welfare for the elderly and children, and "weave a dense and solid social security net."

The statement vowed support for "gazelle enterprises and unicorn enterprises," referring to new, fast-growing companies and high-tech start-ups, and it warned against "vicious competition" but also said China should improve mechanisms to ensure "survival of the fittest" and eliminate "backward and inefficient production capacity."

On the property sector, the Politburo reiterated existing policy goals, saying China will continue to support the delivery of unfinished projects and turn unsold apartments into affordable housing.

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