Policy toolkit further tapped to boost economic growth

Heading into the last quarter of the year, the world's second-largest economy has added policy steam with targeted stimulus to firm up economic operation.

The Political Bureau of the Communist Party of China Central Committee held a meeting Thursday, calling for intensified efforts, including implementing substantial interest rate cuts and promoting the stabilization of the property market, as China strives to meet its major annual economic and social development targets.

Earlier this week, the government's financial authorities announced a broader-than-expected policy package to galvanize the economy's rebound.

These policy measures include reducing the reserve requirement ratio for banks and mortgage rates for existing homes, as well as introducing new monetary programs to boost the capital market, among other initiatives.

China unveiled a set of guidelines Wednesday to promote high-quality and sufficient employment, stressing the promotion of reasonable increases in people's remuneration for labor and expanding the coverage of social insurance.

Such recent policy measures, combined with more effective fiscal policy support, will help sustain the rebound in economic growth for the remainder of the year, UBS economist Wang Tao noted.

This enhanced policy support came amid a more complex environment both at home and abroad for China, with natural disasters such as high temperatures, heavy rain and floods impacting economic activities in the third quarter of the year.

China is seeking to expand its economy by around 5 percent year on year in 2024. The country's GDP had expanded by 5 percent in the first half of the year.

Jin Xiandong, a senior official with the National Development and Reform Commission, the country's top economic planner, acknowledged challenges posed by external environmental changes and the transition from old to new growth drivers, when speaking during a press conference last week.

"However, with macroeconomic policies taking effect and the implementation of reform measures, positive factors and favorable conditions in the economic operation are gathering steam," Jin noted.

The NDRC has held press conferences for three consecutive days this week to share details of progress made in the country's pro-growth program of large-scale equipment upgrades and consumer goods trade-ins this year.

In the first eight months of 2024, China's investment in equipment and tool purchases had increased by 16.8 percent year on year – well above the 3.4 percent increase in total fixed-asset investment.

Meanwhile, spurred by government subsidies for purchases of specific categories of home appliances, over 5.2 million units of TVs, air-conditioners and other products have been sold so far, elevating sales to a level exceeding 24.3 billion yuan (US$3.45 billion).

Local governments have also adopted various means to boost investment and consumption.

Shanghai, China's economic powerhouse, has decided to leverage coupons worth 500 million yuan to stimulate spending in the catering, accommodation, film and sports industries.

Notably, Chinese authorities have signaled that the government has ample room for policy maneuvers to keep economic growth on track.

Pan Gongsheng, governor of the central bank, said that further financial support is on the cards, should the future economic situation require such measures.

Jin also indicated that the government is stepping up policy research and increasing reserve policy options, and will "in a timely manner introduce a batch of incremental policy measures that are operational, effective and tangible to the masses and businesses."

"We have the conditions, capabilities and confidence to achieve the annual goals and tasks of economic and social development," Jin said.