context: In light of recent economic challenges, market observers have been eagerly awaiting the Q2 Politburo meeting, as it carries top leaders’ prescriptions for the macroeconomy.

Politburo met to assess the macroeconomy on 31 July, according to Xinhua. At the meeting Politburo officials confirmed that

  • the economy is generally functioning reasonably and structure continues to improve
  • new challenges emerge
  • the external environment has changed significantly

Politburo proposed six priorities

  • maintaining active fiscal and prudent monetary policies, improving proactiveness, flexibility, and effectiveness to maintain stable economic growth
    • fiscal policy should play a greater role in domestic demand expansion and structural adjustment
    • ‘six stabilisations’: stabilising employment, financial market, trade, domestic investment, foreign capital, and market expectations
  • improving weak spots is a key task
  • combining financial risk prevention and servicing the real economy by
    • keeping the right ‘rhythm’ and intensity for de-leveraging
    • coordinating policy issuance timing
    • improving finance servicing the real economy through institutional innovation
  • pushing for opening up by
    • promoting a series of effective, key reform measures
    • implementing existing opening up initiatives and expanding market access
    • deepening the Belt and Road Initiative
  • resolutely solving the real estate market problem
    • strictly controlling housing price rise
    • implementing differentiated policies to balance demand and supply, guide expectations, and rectify market order
    • building a long-term mechanism for real estate market challenges
  • protecting people’s livelihood and stabilising the society
    • highlighting the role of stabilising employment
    • making sure expenditures on wages, education, and social protection reach their targets
    • enhancing poverty alleviations