The Chinese government unveiled 19 policies specifically aimed at various economic challenges such as extreme weather and the troubled housing market, in the latest effort to boost the recovery of the world's second-largest economy that is grappling with record-setting heat waves, sporadic Covid-19 outbreaks and falling market sentiment. With the government funneling more targeted policy support into the weak links of the economy, a more solid rebound is on the horizon, observers said. The measures were released after the Chinese A-share market saw sharp losses on August 24, as investors face global economic uncertainties. The Chinese economy has been in recovery since June, but the foundation for the rebound is not yet solid, according to an executive meeting of the State Council presided over by Premier Li Keqiang.
Among the 19 new policy measures was the addition of more than CNY300 billion in quotas for financial instruments, and a green light for power generation firms and others to issue CNY200 billion of bonds. Also on the list was the allocation of CNY10 billion for farm equipment and materials. China will also allocate CNY10 billion to help rice farmers cope with drought. The policies also include the approval of a batch of new infrastructure projects and the rolling out of measures to support the development of privately run businesses and the platform economy. The 19 follow-up measures focus on the most prominent growth challenges, experts said, citing a national push to ensure power supply for households and businesses and to strive for a successful autumn grain harvest in the wake of record heat waves and drought.
This batch of measures follows 33 others announced in late May aimed at tackling specific challenges and keeping economic operations within in reasonable range. The measures cover fiscal and monetary support, investment, consumption, food and energy security, and supply chain stability. Li Daxiao, Chief Economist at Shenzhen-based Yingda Securities, told the Global Times that as the 19 measures are targeted solutions for several sectors that have relatively large problems, such as the property market, there should be a relatively obvious impact on investor confidence and the capital market. “The economy supports the stock market, and the newly launched policies show clear, pragmatic, targeted and substantial support for troubled economic sectors,” Li said.
