The State Council has further outlined its plans for economic stimulus in the second half of 2022, in order to keep the Chinese economy ticking amidst the ongoing impacts of the Covid pandemic and heightened geopolitical tensions.
A regular meeting of the State Council convened by Premier Li Keqiang on 31 August called for “accelerating expansions in effective demand…further optimising the commercial operating environment, reducing systemic transaction costs, and continuing to reduce the burden and stimulate the activity of market actors.”
The State Council said that in the first half of September it would release follow-up policy details for stimulus measures outlined in May and August, with key measures set to include:
- Further supporting the projects that were launched in the first half using over 300 billion yuan in policy development financial tools, in order to satisfy their financing needs and avoiding the need for them to “wait for funds”.
- Expanding the scope of support for policy development financial tools, to include urban housing upgrades and province-tier highways. Attracting as much private investment as possible.
- Unveiling policies to support equipment upgrades and improvements by manufacturing enterprises and vocational schools.
- Guiding commercial banks to provide medium-and-long term loans to the development of key projects and equipment upgrades and improvements. Relevant authorities will work with banks on improvements to assessment measures and the formation of incentive mechanisms.
- Raising the efficiency of review and approvals for key projects. Local governments are permitted to make guarantees to the extent of their authority for supplementary procedures following the start of projects.
- Supporting inelastic demand for housing and improvement demand. Local governments will be permitted to make use of policy tools based on local circumstances, and make flexible use of loan policy and special loans to ensure the delivery of housing projects. Driving the consumption of vehicles and other goods.
- The State Council will dispatch supervision, guidance and service teams to several provinces to drive policy implementation.
- Local governments must also establish work supervision, guidance and service mechanisms. Projects must ensure that project funds advance on schedule, funds are not misappropriated and project quality is maintained.