Shanghai: China should continue to ramp up its macroeconomic policies and accelerate the implementation of a set of pro-growth policies to stabilize the economy, experts say.
The country’s macroeconomic policy support for stabilizing growth will remain undiminished.
Improving tax revenue will enhance the sustainability of fiscal policy, and consistently large government spending will support a number of areas, including people’s livelihoods and major infrastructure projects, said Lian Ping, chief economist at Zhixin Investment and president of Zhixin Investment Research. institute.
Lian said that although China’s prudent monetary policy space is shrinking in the short term, the country will still allow domestic factors to shape its policies and maintain relatively loose monetary operations.
He shared his view on macroeconomic policies after the National Bureau of Statistics (NBS) released its official PMI for China’s manufacturing sector on Monday.
The index fell to 49.2 in October from 50.1 in September, below the 50 point mark that separates contraction from expansion.
This decline is caused by factors such as multiple and sporadic Covid-19 cases in October, said Zhao Qinghe, a statistician with the National Bureau of Statistics.
He stressed that the foundations of China’s economic recovery need to be further strengthened.
China will continue to implement a package of policies and follow-up measures to support economic recovery, according to the decision made at the State Council executive meeting last week.
During the meeting, it was decided to make efforts to ensure the implementation of policies and release more policy effects, maintain employment and price stability, improve economic performance in the fourth quarter, and maintain key economic indicators within a reasonable range.
Wen Bin, chief economist at China Minsheng Banking Corp., said:
“Given that October economic data may fluctuate, we do not rule out the possibility of additional fiscal policies, such as further cuts in key loan rates, and market-based benchmark lending rates in China.”
Wang Hao, chief macroeconomic analyst, said the first batch of previously issued special local government bonds is likely to be ready by the end of the fourth quarter. In addition, fiscal spending will gradually move towards technology and education.
With demand for credit still weak, China may cut benchmark interest rates in November to help troubled companies weather the difficult period.
Meanwhile, Wang said structural monetary policy tools may be used more widely to support the development of key industries.
Apart from accelerating the implementation of fiscal policy measures, China should strengthen non-tax government revenue management and speed up initiatives to end unjustified fees and fines imposed on companies, said Liu Chen, a researcher at the Bank of China Research Institute.
The country will also increase the use of structural monetary policy tools to ramp up support for industries and businesses hit hard by Covid-19.
Meanwhile, Liu said, it will take measures to prevent external shocks to the domestic economy and maintain financial market stability.
He advised the government to continue to improve epidemic prevention and control measures, reduce the economic impact of Covid-19, provide transitional jobs for the unemployed and university graduates and provide vocational training in order to form a virtuous circle to improve expectations and restore consumption and economic recovery. – China Daily / ANN