China will maintain the stability, continuity and sustainability of its macro policies in the second half and ensure economic growth stays within a reasonable range, a top decision-making body of the ruling Communist Party said.
A prudent monetary policy means that liquidity would be kept reasonably ample to help small businesses and struggling industries recover, the official Xinhua News Agency reported after the conclusion of a Politburo meeting chaired by President Xi Jinping.
A proactive fiscal policy would need to be more effective, with a good handle on the pace of local government bond issuance and budgeting investments so that results can be achieved at the end of this year or the beginning of next year, the Politburo said.
China’s economy has largely recovered from disruptions caused by the coronavirus pandemic, with the industrial sector leading an impressive recovery. However, manufacturers are grappling with new challenges from higher raw material prices, surging logistics costs and global supply chain bottlenecks.
To bolster a slowing economy, the People’s Bank of China (PBOC) in mid-July surprised the market by lowering the reserve requirement ratio (RRR) for banks, releasing around 1 trillion yuan ($154.19 billion) in long-term liquidity.
China will boost the autonomy of its macro policies, the Politburo said, adding that it would keep the Chinese currency yuan basically stable on a reasonable and balanced level, while ensuring the supply of commodities and prices remain stable.
The meeting urged greater efforts to tap into the potential of domestic markets. The government will support the fast development in new energy vehicles sector and will strive to solve bottleneck issues, it said.
It reiterated its existing policy on the property sector – houses are for living in, not for speculation and called for stabilizing land and property prices and market expectations.
Source: Reuters (Reporting by Stella Qiu and Gabriel Crossley; Editing by Alex Richardson, William Maclean)