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Implementation of policies key to stabilizing economic foundation

China Daily | Updated: 2022-06-23 07:37

Consumers browse dairy products at a supermarket in Shijiazhuang, Hebei province, on Dec 9. [PHOTO BY JIA MINJIE/FOR CHINA DAILY]

The spread of the Omicron strain of the novel coronavirus in some cities since March has increased downward pressures on the economy. How to bring the economy back on track and strive to achieve the annual growth target of 5.5 percent has thus become the country's central task.

Since late May, the State Council, China's Cabinet, has laid out a package of policies for stabilizing the economy, including 33 measures involving fiscal, financial, investment, consumption and other fields. These measures have not only maintained overall economic stability at the macro level, but also helped market entities and specific groups and promoted employment, demonstrating the strength and intensity of the country's policies to stabilize the economy.

Driven by the policies from the central and local governments, some economic indicators are showing positive changes. China's purchasing managers' index in the manufacturing sector reached 49.6 percent in May, up 2.2 percentage points from the previous month, and social financing increased by 2.79 trillion yuan ($415 billion), 839.9 billion yuan more than during the same period last year, which was higher than market expectations.

However, China's economy still needs to go through a complex process of repair. Confidence and vitality will need to be boosted before it can move from the phase of "stabilization" to "recovery". This is more difficult than epidemic prevention and control measures.

The key lies in China's self-development. It not only needs to pursue economic quality, but also to ensure a certain growth rate. Without speed, there is no talk of quality. The epidemic has made it difficult for China to meet this year's 5.5 percent growth target, but the country needs to strive to achieve the growth target.

The repairing of expectations must be fast-tracked to further enhance market confidence. Toward this goal, the country must maintain the continuity and stability of policies, and relevant departments should earnestly assume their responsibilities, actively introduce market-friendly policies and prudently introduce contractionary policies.

Given that market players are the cells of economic development, to stabilize the overall economy the country must stabilize market players and take more practical, operable and useful policy measures. In particular the government should increase liquidity support for micro, small and medium-sized enterprises that are less able to withstand risks through tax cuts and exemptions, rent reductions, loan extensions among other things to help them tide over difficulties.

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