China launches a set of policies aimed at boosting economic expansion
China is optimistic about reaching its economic and social development targets for 2024, buoyed by the continuing impact of existing policies alongside the rollout of new initiatives. These measures have greatly enhanced market expectations.
TroibNews 
**Editor's note:** Liu Chunsheng, a special commentator on current affairs for CN, is an associate professor at the Beijing-based Central University of Finance and Economics. The article reflects the author's opinions and not necessarily the views of CN.
On October 8, Zheng Shanjie, the head of the National Development and Reform Commission, outlined specific measures during a press conference aimed at implementing a comprehensive package of incremental policies. These initiatives are designed to robustly foster China’s economic growth, enhance its economic structure, and maintain a favorable development trajectory. Given the current complex and unpredictable global economic climate, these policies are poised to significantly support China in reaching its annual growth target of five percent.
The key elements of this package encompass a more vigorous and effective execution of macroeconomic policies, a further expansion of domestic demand, increased support for businesses, stabilization of the real estate market, and efforts to invigorate the capital market. These policies span various areas of macroeconomic regulation and focus on revitalizing market dynamics through structural reforms and institutional innovation.
Particular attention is given to policies that directly impact the population’s well-being. By enhancing support for vulnerable groups, including offering one-time living subsidies to individuals in extreme poverty and orphans, as well as raising national student loan limits for both undergraduate and graduate students, the measures aim to improve the welfare of low- and middle-income populations.
Additionally, the government has integrated policies for substantial equipment upgrades with consumer goods trade-ins to stimulate the consumption of bulk commodities. This strategy not only helps unlock latent demand but also encourages energy conservation, carbon reduction, and a comprehensive green transformation. Recent data indicates a notable rebound in passenger car retail sales, while home appliance sales have transitioned from a decline to an uptick, directly demonstrating the beneficial impact of these policies on consumption.
Moreover, the policies place a strong emphasis on boosting consumption in sectors such as elderly care and childcare, addressing prevalent concerns regarding the aging population as well as the needs of the young. By fostering the development of elderly care and childcare services through social contributions, refining fertility support policies, and enhancing basic fertility and pediatric medical public services, there is substantial potential to further stimulate service consumption and promote new consumption trends, including digital and green consumption.
To enhance market confidence, the policies have been refined across several dimensions. This involves adjusting law enforcement related to business conduct, thereby alleviating administrative burdens on enterprises. For instance, the adoption of inclusive and prudent supervision, along with flexible law enforcement practices, aims to avert challenges such as irregular cross-jurisdictional law enforcement and profit-driven practices, ultimately creating a more equitable and transparent business environment. Advance clarification on phased policy arrangements will ensure policy consistency and stability, allowing measures such as tax relief and unemployment insurance to support employment stability. Relevant departments are set to accelerate research and evaluation to determine the continuation of these initiatives, stabilizing enterprise expectations.
The policies are also poised to decrease financing costs for businesses and bolster their confidence by enhancing the assurance of resource allocation, such as gradually extending the no-principal repayment loan policy from small and micro enterprises to medium-sized firms and establishing a coordination mechanism to facilitate financing for smaller businesses.
The initiatives have increased counter-cyclical adjustments within macro policies. By reinforcing the integration of fiscal, monetary, finance, investment, consumption, and income distribution policies, the effects of these measures will be magnified. For instance, actions like lowering required reserve ratios and implementing substantial interest rate reductions have yielded a more favorable financial climate for business financing and investment. The introduction of significant reform measures is also on the horizon, including formulating guidelines for building a unified national market and releasing an updated negative list for market access to further encourage development through reform and invigorate market activity.
In efforts to stabilize market expectations, the policies also prioritize the expansion of effective investment by optimizing investment structures. Full utilization of this year's various funds is underway, while the issuance and deployment of local government special bonds are accelerating to facilitate project initiations. Preliminary strategic lists for major construction projects and central budget investment plans for the upcoming year are being organized and distributed ahead of time to ensure continuity and stability in investment initiatives. Current data shows that all 700 billion yuan of central budget investment has been issued.
In response to fluctuations in both the real estate and capital markets, targeted measures have been implemented. China will increase lending for "white list" projects, leverage special bonds to revitalize idle land stocks, and modify housing purchase restriction policies. These steps are intended to cater to essential housing demand and aspirations for improved living conditions, hastening the absorption of existing commercial housing inventory and reducing stock mortgage interest rates. In the capital market, the government plans to adopt robust and comprehensive strategies to actively direct medium- and long-term funds into the market, alleviate barriers for social security, insurance, and financial products to enter the market, and support mergers and acquisitions among listed companies. These actions are aimed at enhancing market confidence and stabilizing market expectations.
Lucas Dupont contributed to this report for TROIB News
On October 8, Zheng Shanjie, the head of the National Development and Reform Commission, outlined specific measures during a press conference aimed at implementing a comprehensive package of incremental policies. These initiatives are designed to robustly foster China’s economic growth, enhance its economic structure, and maintain a favorable development trajectory. Given the current complex and unpredictable global economic climate, these policies are poised to significantly support China in reaching its annual growth target of five percent.
The key elements of this package encompass a more vigorous and effective execution of macroeconomic policies, a further expansion of domestic demand, increased support for businesses, stabilization of the real estate market, and efforts to invigorate the capital market. These policies span various areas of macroeconomic regulation and focus on revitalizing market dynamics through structural reforms and institutional innovation.
Particular attention is given to policies that directly impact the population’s well-being. By enhancing support for vulnerable groups, including offering one-time living subsidies to individuals in extreme poverty and orphans, as well as raising national student loan limits for both undergraduate and graduate students, the measures aim to improve the welfare of low- and middle-income populations.
Additionally, the government has integrated policies for substantial equipment upgrades with consumer goods trade-ins to stimulate the consumption of bulk commodities. This strategy not only helps unlock latent demand but also encourages energy conservation, carbon reduction, and a comprehensive green transformation. Recent data indicates a notable rebound in passenger car retail sales, while home appliance sales have transitioned from a decline to an uptick, directly demonstrating the beneficial impact of these policies on consumption.
Moreover, the policies place a strong emphasis on boosting consumption in sectors such as elderly care and childcare, addressing prevalent concerns regarding the aging population as well as the needs of the young. By fostering the development of elderly care and childcare services through social contributions, refining fertility support policies, and enhancing basic fertility and pediatric medical public services, there is substantial potential to further stimulate service consumption and promote new consumption trends, including digital and green consumption.
To enhance market confidence, the policies have been refined across several dimensions. This involves adjusting law enforcement related to business conduct, thereby alleviating administrative burdens on enterprises. For instance, the adoption of inclusive and prudent supervision, along with flexible law enforcement practices, aims to avert challenges such as irregular cross-jurisdictional law enforcement and profit-driven practices, ultimately creating a more equitable and transparent business environment. Advance clarification on phased policy arrangements will ensure policy consistency and stability, allowing measures such as tax relief and unemployment insurance to support employment stability. Relevant departments are set to accelerate research and evaluation to determine the continuation of these initiatives, stabilizing enterprise expectations.
The policies are also poised to decrease financing costs for businesses and bolster their confidence by enhancing the assurance of resource allocation, such as gradually extending the no-principal repayment loan policy from small and micro enterprises to medium-sized firms and establishing a coordination mechanism to facilitate financing for smaller businesses.
The initiatives have increased counter-cyclical adjustments within macro policies. By reinforcing the integration of fiscal, monetary, finance, investment, consumption, and income distribution policies, the effects of these measures will be magnified. For instance, actions like lowering required reserve ratios and implementing substantial interest rate reductions have yielded a more favorable financial climate for business financing and investment. The introduction of significant reform measures is also on the horizon, including formulating guidelines for building a unified national market and releasing an updated negative list for market access to further encourage development through reform and invigorate market activity.
In efforts to stabilize market expectations, the policies also prioritize the expansion of effective investment by optimizing investment structures. Full utilization of this year's various funds is underway, while the issuance and deployment of local government special bonds are accelerating to facilitate project initiations. Preliminary strategic lists for major construction projects and central budget investment plans for the upcoming year are being organized and distributed ahead of time to ensure continuity and stability in investment initiatives. Current data shows that all 700 billion yuan of central budget investment has been issued.
In response to fluctuations in both the real estate and capital markets, targeted measures have been implemented. China will increase lending for "white list" projects, leverage special bonds to revitalize idle land stocks, and modify housing purchase restriction policies. These steps are intended to cater to essential housing demand and aspirations for improved living conditions, hastening the absorption of existing commercial housing inventory and reducing stock mortgage interest rates. In the capital market, the government plans to adopt robust and comprehensive strategies to actively direct medium- and long-term funds into the market, alleviate barriers for social security, insurance, and financial products to enter the market, and support mergers and acquisitions among listed companies. These actions are aimed at enhancing market confidence and stabilizing market expectations.
Lucas Dupont contributed to this report for TROIB News
