China economy gets boost from govt meet

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BUSY BUILDERS This April 19, 2022 file photo shows uniformed workers at the factory of gas springs manufacturer Stabilus (Zhejiang) Co. Ltd. in Pinghu, in China’s eastern Zhejiang province. XINHUA PHOTO

BEIJING: In the face of mounting uncertainties, a key meeting of China’s top decision-makers offers a dose of confidence to the world’s second-largest economy.

The Political Bureau of the Communist Party of China Central Committee held a meeting on April 29 to analyze the East Asian country’s current economic situation, vowing to step up policy support to stabilize the economy.

The meeting addressed key issues, including the real estate market, the stock market and the platform economy, while pledging efforts to keep the economy running at a reasonable level.

After the meeting, the Chinese A-share market responded with a long-awaited rebound. The benchmark Shanghai Composite Index closed 2.41 percent higher after bearish sentiment in the week sent it below 3,000 points.

“The meeting came at a pivotal moment, sending a positive signal to stabilize expectations, foreign investment and development,” said Teng Tai, director of think tank WANB Institute.

The Chinese economy is faced with growing complexities and uncertainties due to surging coronavirus infections, and the lockdowns imposed to contain them, as well as the ongoing Ukraine war, as policymakers look to keep growth, employment and prices stable.

The economy grew 4.8 percent year on year in the first quarter as outbreaks fueled by the highly transmissible Omicron variant erupted across China.

Policymakers have introduced several measures to shore up growth. To lower the financing costs for the real economy, the People’s Bank of China recently cut the reserve requirement ratio for financial institutions, while setting up special reloans to support sectors, including those promoting science-and-technology innovation and elderly care.

Last Friday’s meeting called for the faster implementation of policies that had already been arranged, noting that various monetary tools should be utilized well.

The meeting also shed light on the country’s pivotal property sector, reiterating the principle that “housing is for living, not for speculation” while calling for efforts to improve real estate policies based on local realities.

Zhong Zhengsheng, an economist at Pingan Securities, said housing restrictions in more cities were likely to be adjusted, while loans to property developers might ease pressure on their cash flow.

The meeting also demanded answering the demands of foreign enterprises for a convenient business environment while vowing to roll out specific measures to support the standardized and healthy development of the platform economy.

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