(Economic Watch) The Chinese government implements 19 consecutive policies to strengthen the foundation for economic recovery and development
China News Service, Beijing, August 25 (Reporter Chen Kangliang) Chinese Premier Li Keqiang presided over an executive meeting of the State Council on the 24th to deploy successive policies and measures to stabilize the economic package and strengthen the foundation for economic recovery and development.
The meeting pointed out that the current economic recovery continued in June, but there were slight fluctuations and the foundation for recovery was not solid.
While implementing the package of policies to stabilize the economy, 19 consecutive policies will be implemented to form a combined effect, promote the economy to stabilize and improve, keep operating within a reasonable range, and strive for the best results.
Mainly include: on the basis of the 300 billion yuan (RMB, the same below) policy-based development financial instruments have already fallen into the project, an additional quota of more than 300 billion yuan will be added.
Zhao Xijun, a professor at the School of Finance of Renmin University of China, said in an interview with a reporter from China News Agency that in the first half of this year, China effectively coordinated epidemic prevention and control and economic and social development, and achieved positive results in epidemic prevention and control, as well as certain achievements in economic and social development.
However, it should also be noted that the current Chinese economy is still facing the triple pressure of demand contraction, supply shock, and weakening expectations, and the momentum of economic recovery needs to be strengthened.
Although the economy continued to recover and developed in July, it still fluctuated slightly.
In the face of the current economic situation, the official introduction of strong and targeted measures is conducive to consolidating the foundation of economic recovery.
Zhao Xijun pointed out that the policy scope introduced at this meeting covers many fields such as finance, real estate, taxes and fees, logistics, etc.
At the same time, it was decided to send a working group to stabilize the economic market supervision and service. It is expected that this move will help guide the local government to more accurately and efficiently implement the central policy deployment, prevent the occurrence of "running and leaking", and ensure that the policy is not out of shape or deviated.
In response to the meeting's proposal to increase the quota of policy-based development financial instruments, Zhao Xijun believes that less than two months have passed since the State Council executive meeting on June 29 proposed to increase financing support for major projects through policy-based development financial instruments.
In the meantime, policy-based development financial instruments have played an important role in supporting infrastructure construction.
According to incomplete statistics from institutions, as of August 16, 2022, the amount of policy development financial instruments has reached 31.261 billion yuan, of which more than 50% has been invested in the transportation, warehousing and postal industries, and 40% has been invested in water conservancy, environment and public facilities management industry.
Dong Qi, an analyst at Guotai Junan, pointed out that policy development financial instruments are essentially special construction bonds. Compared with other instruments, their advantages include: no increase in fiscal deficit, no need for a fiscal budget, large scale and fast implementation efficiency; low financing cost and short term Long-term upward; the mechanism is more flexible and has a leverage effect, which can leverage social funds to follow up, and can also drive medium and long-term bank loans.
Zhang Xu, an analyst at Everbright Securities, also pointed out that since 1996, China has implemented a capital system on a trial basis for various business investment projects. Must not be withdrawn.
It is precisely because of the existence of the above-mentioned system that the financing of project capital sometimes becomes a bottleneck restricting project construction.
However, in the current environment where efforts are needed to consolidate the foundation for economic recovery and development, the constraints formed by project capital should be relaxed.
Zhang Xu believes that compared with other measures to improve capital supply or reduce capital ratio requirements, policy-based development financial instruments have obvious speed advantages and can quickly form capital supply.
The rapid availability of capital can buy a lot of time for promoting faster and better economic operation and striving to achieve a better level of economic development throughout the year. It is expected that policy-based development financial instruments will play a greater role in the second half of the year.
Fan Chao, an analyst at Changjiang Securities, also said that considering the large public financial expenditure in the first half of this year, with the successive implementation of new combined tax and fee support policies, it is expected that public financial revenue will still face pressure in the second half of the year, which will affect the intensity of public financial expenditure. Sustainability.
Overall, it is expected that policy development financial instruments will become an important source of funds for infrastructure construction investment in the third quarter.
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