In response to a recent slowdown in economic momentum and subdued domestic demand, China’s ruling Communist Party has committed to intensifying support measures. At a meeting led by President Xi Jinping, top leaders of the 24-member decision-making body vowed to introduce new policies in due course, aiming to bolster the economy and ensure it remains on track to meet annual growth targets.
The official Xinhua News Agency reported that officials emphasized the need to accelerate current policies and implement a fresh set of initiatives, although specifics were not disclosed. Highlighting concerns over insufficient domestic consumption amid a challenging global environment, the meeting underscored the urgency of speeding up the issuance and utilization of local government special bonds, crucial for funding infrastructure projects.
According to the statement, there will be a strategic shift in economic policy towards enhancing people’s livelihoods and promoting expenditure, with a particular focus on sectors such as services, tourism, and elderly care. This approach aims to leverage consumption as a key driver of domestic demand.
China’s economy recently experienced unexpectedly sluggish growth, marking its weakest performance in five quarters, largely attributed to faltering consumer spending despite robust export figures. This downturn has jeopardized Beijing’s target of achieving approximately 5% GDP growth this year, prompting calls for additional stimulus measures.
Following a Communist Party meeting earlier this year that set out long-term economic strategies, the central bank has implemented a series of surprise interest rate cuts, while the Finance Ministry has allocated funds from special sovereign bonds to initiatives like a vehicle scrappage scheme aimed at stimulating consumer spending.
The Politburo’s July gathering, which focuses on economic matters, is one of its three annual meetings and is closely monitored for signals of policy adjustments. However, observers note that policy discussions have become less transparent, reflecting a trend towards more centralized decision-making under President Xi Jinping.
Leading up to the meeting, economists had urged the government to expedite fiscal expenditures, which had declined by nearly 3% in the first half of the year compared to the previous year, potentially weighing on overall economic activity.
In conclusion, China’s latest commitments underscore its proactive stance in addressing economic challenges, with a clear emphasis on revitalizing domestic demand to sustain growth amid global uncertainties.
