From urging the start of construction projects to creating a preferential policy environment for the development of new energy vehicles (NEVs), China’s National Development and Reform Commission (NDRC) has unveiled a set of policies aimed at further propelling the economy as pressure persists.
Experts said one of the highlights of the next-stage economic stimulus work will be implementing the construction of approved infrastructure projects, while boosting consumption will be another focus, judging by the current economic situation.
At a press conference on Monday, Meng Wei, spokesperson for the NDRC, said she would take strong measures to speed up the construction of the project after the first batch of policy-based development finance tools. worth 300 billion yuan ($42.81 billion) as soon as possible.
Meng also said China will select and recommend projects, speed up capital investment, urge local governments to grab the window, and push the construction of projects as soon as possible.
China decided to employ 300 billion yuan in financial instruments at a State Council executive meeting in late June. The funds were intended to replenish capital for large projects or finance projects financed by special purpose bonds. In August, the Chinese government doubled the quota for these instruments.
Yue Xiangyu, a researcher at the China Economic Thought Development Research Institute of Shanghai University of Finance and Economics, said that instead of accelerating the approval of investment projects in fixed assets, the focus will be on the implementation of those already approved.
“China’s economic indicators for August looked bright, but the main reason for the rally was last year’s low base, instead of a real recovery. In particular, data from the infrastructure sectors and real estate showed that many projects had not passed the approval stage and infrastructure had not been fully functional to revive the economy as the market had expected,” Yue said. to the Global Times on Monday.
Chinese infrastructure investment jumped 14.1% in August, from 9.1% in July, but real estate investment fell 13.8%.
Besides investment, consumption is another highlighted area where the authorities are likely to implement stimulus policies. Meng said the NDRC is accelerating the study of launching policies and measures to create new consumption scenarios and spur faster recovery.
Chen Jia, an independent international strategy researcher, said the economic contribution of consumption has steadily increased, which is why authorities are stepping up efforts to push the sector forward.
“Grabbing the consumer sector is like grabbing the locomotive of the economy,” Chen told the Global Times, adding that surprisingly strong consumption still proves the effectiveness of consumer stimulus policies at a stage. early.
In particular, the NDRC revealed its plans for the NEV sector, such as optimizing the policy environment to make it more conducive to development, as well as fostering global cooperation.
According to Chen, if China can promote application scenarios for autonomous driving, many connected industries could “explode,” including next-generation communication networks and new-energy batteries.
“Considering that China has broken through the bottleneck of the 14-nanometer chip manufacturing process, along with its huge population base and demand from urbanization, the potential for NEV application scenarios is limitless. The authorities are not only looking to increase the consumption of NEV. They are also eyeing the development potential of future industrial clusters,” Chen noted.
Cong Yi, a professor at Tianjin University of Finance and Economics, also said China has launched multifaceted policies that will address market blockages and ease difficulties faced by small businesses. Policies will be continuously rolled out in these directions, he said.