Measures to stabilize growth on the agenda

By Chen Jia | China Daily
Updated: June 21, 2019
Beijing's CBD area. [Photo/VCG]

Further adjustments to China's macroeconomic policies can be expected, including consumption stimulus and more flexible monetary policy, which aim to stimulate domestic demand in the second half of this year and counteract the negative impact from trade tensions, according to some policy researchers from the National Development and Reform Commission.

Compared with the macroeconomic policies conducted in the first half of 2019, the upcoming measures will be more flexible and comprehensive, and a series of proposals have been made to the country's top policymakers, focusing on strengthening domestic investment and consumption, to stabilize economic growth and market sentiment, an NDRC senior research fellow, who declined to be named, told China Daily on Thursday.

High-level policymakers usually gather in July every year to discuss the current economic situation and set the policy tone for the second half, based on the first-half economic performance.

"Investment will remain the key force to support growth, but in some new areas, focusing especially on 5G infrastructure and innovative manufacturing," said the researcher.

"Monetary policy will be much more flexible as we expect," the insider said. And the room for interest rate cuts has been enlarged and it could be "a potential option", after the world's major central banks shifted to a dovish stance, especially when the US Federal Reserve sent additional monetary easing signals on Thursday. Some other tools include the Standing Lending Facility and the Medium-term Lending Facility.

Expanding domestic consumption could be another crucial task "for the next step", said Chen Dongqi, chief researcher at the China Academy of Macroeconomy Research, a think tank under the NDRC.

The policies, which will especially boost consumption demand among low and middle-income groups, will further attract global capital, advanced technology and international talents.

As the domestic economic downside risks are increasing, countercyclical policies will be more flexible, to further expand efficient demand at the right time and mitigate cyclical conflicts, said Chen.

On Tuesday, President Xi Jinping had a phone conversation with US President Donald Trump, and they decided to have a meeting on the sidelines of the upcoming G20 Leaders' Summit in Osaka, Japan, to discuss in-depth bilateral ties and issues of common concern, Xinhua News Agency reported.

Economists and the market saw the phone call as a positive signal, which may allow the Sino-US trade talks to get moving again. They expect more policies could be issued after the G20 summit, based on the results of discussions between the two countries' leaders.

"Cutting interest rates could be a choice for the Chinese central bank, and there is opportunity to cut interest rates this year, coordinating with the fiscal policy which focuses on tax and fee reduction," Shen Jianguang, chief economist at JD Digits, a Chinese fintech group, told China Daily.

China is still facing economic downside risks, indicated by the recent figures on electric energy production and industrial output, said Shen.

5G and the internet of things will remarkably enlarge the domestic market for goods and services, Zang Yueru, director of the Institute of Market and Price Research under the NDRC, told China Daily on Thursday.

"As we forecast, in 2025, the size of China's major consumption market for automobiles, traffic services, housing rental, homes appliances, and other urban services, will increase to around 40 trillion yuan, and it may become the world's largest."

If you have any problems with this article, please contact us at and we'll immediately get back to you.