The leadership of the Chinese Communist Party (CPC) acknowledged, on Monday, that the country’s economic recovery faces “new difficulties and risks” and suggested that it will adopt measures to support growth in the second half of the year.
During a meeting led by the secretary general of the PCC and President of the country, Xi Jinping, the Politburo of the Party recognized “difficulties” in the “current functioning” of the economy, after the country announced, last week, that the GDP (gross domestic product) registered a year-on-year growth of 6.3%, in the second quarter of the year, below analysts’ expectations, since the base effect of comparison, after a year of strict blockades, predicted a higher rate.
Compared to the first quarter of the year, the economy grew by just 0.8%, suggesting a slowdown in the recovery, after Beijing dismantled the policy of ‘zero cases’ of covid-19.
Last month, the unemployment rate among young people aged between 16 and 24 also reached a new record of 21.3%, according to official data.
Chinese leaders traditionally meet in late July to review the country’s economic situation ahead of the summer break.
China has set a growth target of “around 5%” for this year, a figure that may be difficult to achieve, warned Chinese Premier Li Qiang.
“We must carry out strong and precise macroeconomic regulation, take countercyclical measures and have more policies available on the table,” said the minutes of the meeting, quoted by the official Xinhua news agency.
The Politburo acknowledged that domestic demand remains “insufficient” and that there are “difficulties in the operations of some companies, hidden risks and dangers in key areas and a dark and complex external environment”.
“We must adopt a proactive and prudent fiscal and monetary policy, but also optimize the implementation of tax cuts or make the most of the role of quantitative and structural monetary tools,” it added.
Xi Jinping called for efforts to “expand domestic demand, enhance confidence and prevent risk”.
He also stressed that the Communist Party must “meet social expectations” and “adequately expand economic production” in the country.
Polibturo promised to give “strong support” to scientific and technological innovation, the real economy and the development of small and medium-sized companies.
The CCP also guaranteed that it would keep the exchange rate of the yuan, the country’s currency, “generally stable and at an adequate and balanced level”, and promised “efforts to reinvigorate the capital market and increase investor confidence”.
On the same day, the Chinese government’s highest economic planning body announced a plan to attract private capital to infrastructure projects in “key sectors”, as part of a series of initiatives that the authorities have released in recent days to try to revive the post-pandemic recovery.
The National Commission for Reform and Development specifically targets sectors such as transport, conservation of water resources, clean energy, new infrastructure, the manufacturing sector or the modernization of agriculture.
