context: Beijing is attempting to curb accumulating local debt while guiding funding into scitech and social security as patient capital. Amidst the need for systemic change, there have been 20 months of declining producer prices and stagnated inflation. While the 2024 Third Plenum did not announce major stimulus, relevant policies came in September, when the People’s Bank of China lowered the RRR (reserve requirement ratio), encouraged stock buybacks and promised tools to enrich insurers and securities funds. The September Politburo meeting made central intentions and perceptions on the economy clear.
The Politburo held a meeting on 26 September to discuss current economic circumstances and strategise upcoming economic work, reports Xinhua.
While praising Xi Jinping's 习近平 leadership core in advancing high-quality development and resolving risks in key sectors, the meeting recognised new problems in the economy.
The meeting called for
- strengthening monetary policies for countercyclical adjustments
- guarantee necessary fiscal spending
- uphold the ‘three guarantees’ for grassroots
- prevent deterioration in people’s livelihoods
- guarantee sufficient wages
- sustain socioeconomic operation
- using the national ultra-long-term bonds and local special bonds well
- call the government to take the lead in stimulating investment
- lower deposit-reserve ratio and cut rates
- stop the real estate sector from declining and stabilise the industry
- strictly monitor growth in the housing supply
- refine existing stocks
- make loans easier for projects in the ‘white list’ to
- revitalise assets
- develop unused lands
- respond to the masses’ needs
- readjust property-purchasing limitations
- lowering interest rates of existing individual housing loans
- refine policies in land, tax and finances
- advance a new development paradigm for the real estate sector
- revitalise capital markets
- guide long-to-long-term capital to enter the market
- break down barriers that hinder capital from social security, insurance and financial management from entering the market
- support the restructuring of listed companies
- reform systems for the public offering of funds
- research and roll out policies to protect retailers
Refining the economic structure is also important
- roll out the Private Economy Promotion Law
- combine measures on consumption with social relief
- heighten income of mid-to-low-income households
- upgrade consumption structure
- back and regulate support for the elderly and childcare
- strengthen measures for attracting foreign capital
- reform entry permit policies for foreign capital in the manufacturing sector
- build a market-based, legalised and internationalised business environment
The government should also safeguard social relief
- help high school graduates, migrant workers and zero-employment households to find jobs
- aid groups who are disadvantaged in the job market
- elderly
- disabled
- long-term unemployed
- support low-income households
- stabilise prices for necessities such as food and energy
- guarantee food security and agricultural production