MNI BRIEF: China To Step Up Macroeconomic Policies - Politburo
China will focus on boosting consumption to expand domestic demand, strengthen countercyclical adjustments and reserve, and launch additional policy measures in a timely manner, the state-run Xinhua News Agency reported following the Politburo meeting on Tuesday.
Economic policies must promote consumption, increase residents’ income through multiple channels, enhance the spending willingness of low- and middle-income groups, and boost service consumption including tourism, elderly care, childcare and housekeeping, the meeting noted.
The issuance and use of local government special bonds must accelerate, and ultra-long-term special treasuries used to support national projects, the meeting said, adding a variety of monetary-policy tools should be implemented comprehensively to increase support for the real economy and promote a steady decline in social financing costs. Policymakers also mentioned the need for maintaining the basic stability of the yuan.
Advisors told MNI earlier that the first-half slowdown and rising external uncertainty are likely to prompt an increase in government borrowing and fiscal stimulus to ensure the annual GDP target of “around 5%” is met. (See MNI EM: China Slowdown Likely To Prompt Extra Fiscal Stimulus)