BEIJING — China will adopt a host of measures to further bolster demand, to promote effective investment, and boost consumption, according to a decision made at the State Council's executive meeting chaired by Premier Li Keqiang on July 29.
The meeting underscored the imperative to ensure effective COVID response, economic stability, and development security, and seize the current crucial time to consolidate the foundation for recovery and keep major economic indicators within a proper range for the whole year. Employment and price stability is of vital importance for maintaining stable economic performance. Multi-pronged measures will be adopted to boost effective demand.
"We must fully leverage the key factor of effective investment to generate physical gains as quickly as possible. The third quarter is a peak season for construction projects, hence crucial for sustaining the momentum of an economic rebound," Premier Li said. "We should better utilize the special-purpose bonds and policy-based and development-oriented financial instruments, and the coordination mechanism on effective investment for major projects should continue to operate with high efficiency."
The key role of effective investment in boosting economic recovery and growth should be harnessed. Effectiveness should be underscored in making investment. It is essential to take swift and decisive actions and avoid missing opportunities while steering clear of massive stimuli and an expedient approach.
Projects under central government budgetary investment will be accelerated, and local governments are urged to expedite the use of special-purpose bonds. The policy-based and development-oriented financial instruments will be utilized to good effect in a market-oriented manner.
Projects that they support should be consistent with the 14th Five-Year Plan and deliver both immediate and long-term benefits. Investment will be mainly directed to infrastructure projects including transportation, energy, logistics, agriculture, rural areas, and new infrastructure. The funds shall not be used for land reserve or to replenish local public finances.
Projects chosen should have ripe conditions, be profitable, and deliver results as quickly as possible. The development of competitive industries must be completely market-based.
The coordination mechanism for effective investment for major projects should continue to operate efficiently. A fast-track will be opened and parallel review by competent departments exercised to expedite approvals for land use, energy consumption, and environmental assessment in accordance with related laws and regulations, to generate more physical gains as quickly as possible in the third quarter while ensuring project quality.
"Consumption should still be the main driver for stabilizing growth. The new round of COVID flare-ups has hit consumption hard and caused a quite big decline. In the second half of the year, we still need to do everything possible to spur consumption, starting from big-ticket consumer goods," Premier Li said.
The meeting stressed the need to keep consumption as the main driver of growth. Except for a few regions, localities with automobile purchase restrictions should increase new license plate quotas and ease the eligibility requirements for car buyers step by step. Bottlenecks in the circulation of used cars should be removed, and the tax exemption policy for new energy vehicle purchases will be extended.
Support will be extended to meeting people's basic housing needs and the need for improved housing conditions. Localities will be encouraged to provide subsidies or interest discounts as appropriate on environment-friendly smart home appliances and building materials. Integration of online and brick-and-mortar consumption will be accelerated, and digital consumption will be actively promoted.
Support policies for industries in difficulty such as catering, retail, tourism, and transportation will be fully implemented, and extra value-added tax deduction in the services sector will be extended across the board. All eligible market entities in the services sector should be able to benefit to the fullest extent possible, to help them overcome difficulties and bolster consumption.
The meeting also noted the overall price stability in China, which is no mean feat against the backdrop of high inflation worldwide.
Food is of paramount importance to the people and food prices are the basis for overall price levels. With summer grain output hitting a record high this year, we must make every effort for high grain yields this autumn, to keep the annual grain output above 650 billion kg.
Due responsibilities must be fully discharged to follow the farming schedule and ensure the acreage for late-season rice and late-autumn crops. The provision of agricultural supplies such as fertilizers will be enhanced and farmland management strengthened, to effectively guard against drought, floods, plant diseases, pests, and other disasters.
Early-season rice and autumn grains should be well harvested in terms of both quantity and quality, and market entities of various forms of ownership are encouraged to join in the procurement. Minimum purchase prices for rice will be launched in a timely manner to ensure farmers' incomes.
The central government will allocate another agricultural supplies subsidy this summer, and local governments will provide supporting funds. Fiscal and financial support for the construction of rice seedling centers will be provided to help promote double-season rice.
"A bumper harvest and increased grain output this summer not only serves to meet China's own demand but also, in a way, contributes to the stability of the global food market. Going forward, we must focus on promoting autumn grain production to ensure a bumper grain harvest for the whole year," Premier Li said.