A senior official from China’s National Development and Reform Commission (NDRC) has said that the central government will ensure that the economy’s performance remains within a “rational range.”
In an interview with state-owned media conducted on 8 January, NDRC vice-head Ning Jizhe (宁吉喆) highlighted ongoing growth in household incomes and consumption levels alongside China’s sheer population size as key supports for future growth.
“China has a population of nearly 1.4 billion, and a middle-income demographic of over 400 million,” said Ning. “We need to continue to deepen reforms of the income allocation system, increase the incomes of the low-income population, expand the middle-income population, and strengthen the consumption capability of citizens.
“The trend of continuous expansion and upgrade of consumption is pronounced, as primarily embodied by the ‘four upgrades:’
“The first is a continuous upgrade in overall consumption towards services consumption, with China’s Engel coefficient falling to beneath 30%.
“The second is consumption upgrading towards mid and high-grade consumption, the third is services consumption upgrading in terms of quality and efficiency, and the fourth is offline consumption upgrading towards integrated online and offline consumption.”
Ning also pointed to the continued role that investment will play in supporting China’s future economic growth.
“Potential investment demand at China’s stage of development remains immense,” said Ning. “We will make compensating for shortcomings the key mission for deepening supply-side structural reforms, and pragmatically increase effective investment.”
Key focal points for Chinese investment in 2019 are set to include poverty alleviation and relocation, secure housing, the “Three Agricultures,” key infrastructure development, innovation drivers, coordinated regional economic development and energy efficiency and environmental protection.
“To this end, we will further increase the investment scope of the central government budget, and further accelerate the schedule for the provision of investment within the budget, as well as provide a raft of investment in advance, in order to further attract and expand the spheres and scope of investment by social capital in key state projects
“Just previously, the standing committee of the National People’s Congress issued some of the new local government bond quota in advance, and local government special bonds have already seen a sizeable increase.”
Ning also highlighted continued efforts to further open the Chinese economy to foreign investment tin 2019.
“We will comprehensively optimise the environment for the usage of foreign capital, in accordance with the need to actively drive high-level opening, and drive the implementation as soon as possible of key foreign investment projects” said Ning.
“We will further implement the 2018 edition of the national foreign investment negative list and the free trade trial zone negative lists, and comprehensively clear out and cancel restrictions placed against foreign investment in spheres outside the lists.”
Ning also signalled measures to expand the use of corporate bonds to solve the financing challenges of Chinese enterprise.
“As a direct financing tool, optimising and increasing corporate bond issuance can effectively resolve the financing difficulties of enterprise, and in particular private enterprise and small and micro-enterprise.
“In December last year NDRC issued the ‘Notice on Further Supporting Direct Financing by High-quality Enterprise and Further Strengthening the Ability of Corporate Bonds to Service the Real Economy’ (关于支持优质企业直接融资 进一步增强企业债券服务实体经济能力的通知), to support the issuance of bonds for financing purposes by high-quality enterprises, including private enterprise, and we have already approved a 6 billion yuan corporate bond issuance by BYD.
“This year, we will expand the vigour of support for bond financing, expand the scale of bond issuance by high-quality private enterprise, and further accelerate the schedule for approvals.
“We will also encourage all regions, and primarily large and medium-sized local enterprises, to issue small and micro-enterprise collective bonds, to raise funds to primarily be used to support private enterprises that suit upgrade and optimisation of the economic structure and have development prospects.”