During a press conference on October 8th at the State Council Information Office in Beijing, Zheng Zhanjie, the Director of China’s National Development and Reform Commission, announced plans to strengthen the implementation of macroeconomic policies in China. He emphasized that there will be an increased focus on counter-cyclical adjustments.
When asked about the specifics of these measures, Zheng detailed a new package aimed at boosting counter-cyclical adjustments across several macroeconomic policies. He highlighted the necessity for a coordinated and systematic approach that integrates fiscal, monetary, investment, consumption, and income distribution policies. Zheng pointed out the importance of innovative collaboration among these policy tools to optimize their timing and effectiveness, ultimately maximizing their synergistic potential.
Zheng also stressed the critical need for essential fiscal spending, advocating for accelerated spending rates to enhance economic development. He mentioned providing more support for local governments in executing debt swaps, which are intended to alleviate debt risks. This strategy will involve reducing reserve requirement ratios and implementing substantial interest rate cuts to assist state-owned banks in bolstering their core tier-one capital. These moves are designed to create a more favorable financial landscape for investment and the implementation of macroeconomic policies. He noted that measures such as reserve requirement decreases and interest rate reductions are already underway, with other financial initiatives in progress.
Regarding significant reforms, Zheng promised a series of practical initiatives aimed at sustainable economic growth. These initiatives include establishing guidelines for a national unified market, releasing an updated negative list for market access, developing mechanisms for future industrial investment growth, enhancing the integration of digital and real economies, and improving the social credit system. He also mentioned the intention to attract more investments by expanding self-initiated openness, revising the foreign investment encouragement catalog, and introducing major foreign-funded projects along with a more open visa policy for transit travelers.
Zheng further highlighted the importance of maintaining consistency in macroeconomic policy orientation. He called for the effective use of an evaluation mechanism to ensure alignment and synchronization of policy objectives, tools, intensity, timing, and rhythm across various sectors. Each policy will undergo a thorough evaluation prior to implementation to ensure it aligns with macroeconomic goals. During the execution or adjustment phases, it’s crucial that policies maintain this consistency, and post-implementation, timely reviews and assessments will be conducted to gauge effectiveness. Any policies that deviate from the overarching macroeconomic policy orientation will be promptly adjusted or suspended.
