Chinese local governments accelerate economic stimulus policy implementation in crucial 2Q
People gather on the Bund along the Huangpu River in Shanghai on June 1, 2022, following the easing of COVID-19 restrictions in the city after a two-month lockdown. Photo: AFP
Senior officials from several Chinese provinces have recently made field visits to coordinate solutions to problems faced by the local economy, the latest efforts by Chinese local authorities to promote the implementation of policies and measures aimed at stabilizing the economy. ‘economy.
This decision, along with other grassroots efforts, shows that the recent national videoconference, attended by over 100,000 participants, and other growth-enhancing meetings, is having a huge uplifting effect across the country, which could yield a better-than-expected recovery, experts noted.
During a market survey in Taizhou, east China’s Jiangsu Province, on Thursday and Friday, Jiangsu Provincial Governor Xu Kunlin said local authorities should “seize every minute and every second” to push the implementation of the policy, as well as make every effort to stabilize the economic market, according to the Xinhua daily.
Zheng Shanjie, Party secretary of east China’s Anhui Province, listened to the opinions and face-to-face demands of businesses Thursday during an on-site meeting in Hefei’s Baohe District, aimed at help businesses meet the challenges, Anhui Daily reported.
During an inspection trip to Ganzhou this week, Ye Jianchun, governor of east China’s Jiangxi province, stressed that every effort should be made to achieve second-quarter economic targets by ensuring the safety, high-quality growth and environmental protection and laying a solid foundation for robust year-round economic development, according to the provincial government’s website.
Along with the field visit of senior provincial officials to inspect the economic situation, provincial governments, such as Henan Province (central China) and Gansu Province (northwest), have also convened meetings on the deployment of policies to stimulate growth.
On Saturday, central China’s Hubei Province held a meeting to organize major work for the next stage. The meeting noted that Hubei will push the implementation of a basket of economic stabilization policies to ensure the economy operates within a reasonable range.
According to a statement published recently on the website of the Central Commission for Disciplinary Inspection.
All of these steps mark intensified efforts at the grassroots level to ensure implementation of a 33-point stabilization policy package released by the State Council in late May following an unprecedented nationwide video conference. with more than 100,000 attendees, experts said.
During the meeting, Premier Li Keqiang stressed the implementation and effect of all stabilization measures to protect market entities, employment, people’s livelihood and maintain the functioning of the economy within a reasonable range.
After a series of recent pro-growth meetings at the central level, everything now depends on the ability of local efforts to keep the economy within a reasonable growth range in the second quarter. China’s economy’s ability to shrug off the severe impact of domestic disease outbreaks and a complicated international environment in the second quarter is crucial to achieving the full-year growth target of 5.5 percent, Tian said. Yun, former vice director of the Beijing Economic Operation. Association, told the Global Times.
The decision by provincial officials to carry out economic work also showed the urgency for local governments to study detailed and separate work plans based on the situation in the region, after a consensus was reached among decision makers to stabilize the economy.
“Right now, local governments themselves are motivated to launch economic stimulus packages, as many of them will face financial problems if the economy does not improve in the coming months,” Cong said. Yi, a professor at Tianjin University of Finance and Economics. World times.
Many local governments in China have seen their tax revenues plummet in recent months, especially when the recent outbreak of Omicron in Shanghai disrupted the country’s supply chains. For example, Shenzhen’s general government budget revenue fell 12.6% in the first four months, Beijing’s fell 3.5%, while Shanghai’s revenue fell 6.63%.
According to Tian, if the economy is stuck in a low-growth state for too long, the costs of returning it to the original trajectory will be enormous. That is why all levels of government – from the State Council, cabinet to ministries to local governments – are rushing to boost economic growth, he said.
Cong noted that recent top-down efforts to stimulate the economy reflect China’s institutional advantages, as policies are pushed in the country in a way of “unified deployment, unified action and regional dynamic role.”
“It means that when difficulties arise, efforts are launched with a clear direction instead of having fragmented and contradictory policies,” Cong said.
Such efforts by local governments to implement economic stimulus are raising hopes among analysts about China’s economic outlook this year, which has already shown unexpected positive signs recently despite the challenges imposed by the recent lockdown in Shanghai and the continued spread of the coronavirus.
China’s U.S. dollar-denominated exports rose 16.9 percent year on year to $308.25 billion in May, according to customs data, far beating market expectations.
This is proof that despite the current downward economic pressure, there should be a strong rebound in the Chinese economy in the third and fourth quarters as China’s economic fundamentals have not changed, experts said. .
“The export growth figure, which greatly exceeded expectations by around 8%, indicates that China’s industrial chain and supply chain, especially in the Yangtze River Delta region, are recovering faster than expected. , indicating that the Chinese economy may be more resilient than many had anticipated,” Tian noted.
This, combined with the support measures, has and will continue to inject confidence into the market and the real economy at the critical juncture of the Chinese economy, he said.
Cong takes a more cautious view, saying China’s ability to achieve its economic goal depends on the speed and effects of local economic stimulus policies.
Exports should not be the mainstay of China’s economic growth, he said, as the sector is experiencing too much uncertainty. China’s major challenge is that its economic work focus today, which is internal circulation, has not shown enough momentum to recover.
“China’s capabilities and consumption demands are there, but the problems still lie in removing market barriers, such as different regional market standards or mutual blockages on large internet platforms, which remove scale. consumption,” Cong said.
He added that once policies are implemented to remove these barriers, as previously outlined in the government’s plan to establish a unified market, consumer demands will be unleashed and a strong economic rebound can be expected. .