TMTPost -- Chinese Premier Li Qiang signals the government feels urgency of introducing new stimulus as more fiscal spending gets ready to boost the world’s second largest economy.
Credit：Xinhua News Agency
Premier Li underlined developing new policy options to stabilize the economy and promote development, and launching them timely in accordance with changes in the economic situation, the state news agency Xinhua reported Tuesday.
Li called for efforts to promptly implement the incremental policies to stabilize China’s economy, and strive to accomplish the annual economic and social development targets at a symposium with experts and entrepreneurs to hear their views on China's current economic situation and the next steps on economic work. Efforts should be made to accelerate the implementation of policies already introduced and formulate plans for policies currently under study as early as possible, Li said.
The premier stressed the need to listen to the voices of the market and respond to social concerns when formulating and implementing policies, and continuously boost confidence in development. He urged to improve the business environment and stimulate the vitality of enterprises, with solid efforts to provide relief to enterprises in difficulties and implement pro-business policies.
At a study session held by the State Council Tuesday, Li emphasized the importance of enhancing the consistency of macro policy orientation and creating great synergy to promote high-quality development. The targets of policies should be confirmed after considering the overall needs of economic and social development, said Li. Given the economy weighed by the relatively high downward pressure , policies conducive to stabilizing growth and expectations should be rolled out more proactively, and contractionary and inhibitory measures should be introduced with prudence, Li said.
Tuesday also saw China’s state planner, the National Development and Reform Commission (NDRC), pledged a raft of economic stimulus at press conference, though it still fell short of investors’ anticipation of a much larger package of stimulus measures.
China’s central government will allocate a total of RMB200 billion (US$28 billion) which is under next year’s plan to local governments later this year, including a RMB100 billion investment plan from the central government’s budget and another RMB 100 billion for projects to fund so-called “dual important projects”--major national strategies and security capability, said Zheng Shanjie, head of the NDRC. Earlier release of these investment projects will support local governments in accelerating the preliminary work and construction, Zheng told reporters.
A certain proportion of these projects will involve urban renewal, mainly in the construction of pipelines for gas, water, sewage and heating, which is expected to generate investment demand of around RMB4 trillion in the coming five years, said NDRC deputy head Liu Sushe at the same press conference.
As part of efforts on the investment front, ultra-long special treasury bonds will continue to be issued next year with optimized investment areas to implement major national strategies and build up security capacity in key areas, Zheng noted. China has planned 1 trillion-yuan issuance of ultra-long special treasury bonds this year to support dual important projects. NDRC deputy chairman Liu also urged local governments to complete the issuance of the remaining RMB290 billion of local special bonds by the end of this month.
Zheng urged for ramping up fiscal spending to bolster the economy and providing stronger support for local governments to conduct debt replacement and defuse debt risks. A raft of reform measures conducive to economic development will be rolled out, he said. These reforms include the formation of guidelines on building a unified national market, a new negative list for market access, and mechanisms to ensure increased investment in future industries.
China will expand the catalogue of industries that encourage foreign investment, unveil a new group of major foreign-invested projects and make its visa-free transit policies more open, according to Zheng. The incremental policies also aim to boost domestic consumption and investment demand, he noted.
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