China to step up policy support to steady economy

BEIJING (REUTERS) - China will step up policy support to stabilise the economy as domestic Covid-19 outbreaks and the Ukraine war raise risks, state media quoted the Politburo, a top decision-making body of the ruling Communist Party, as saying on Friday (April 29).

Chinese policymakers face an uphill battle to ward off an economic slowdown that threatens job losses in a politically sensitive year, as Covid-19 lockdowns disrupt supply chains and jolt businesses.

China will adopt a package of policies to help Covid-hit industries and small firms, the media reports added, citing a meeting of Politburo chaired by President Xi Jinping.

"The Covid-19 and Ukraine crisis have led to increased risks and challenges. The complexity, severity and uncertainty of China's economic development environment have increased," the Politburo was quoted as saying.

"Stabilising growth, employment and prices are facing new challenges. It is very important to do a good job in economic work and effectively protect and improve people's livelihood."

Financial markets were hit hard over the past two weeks on fears that lockdowns in China would cause severe damage to its economy and derail a global recovery just as many countries are rebounding from the pandemic-led slumps.

However, the Politburo said authorities will continue to implement the controversial dynamic zero Covid-19 policy to control the outbreaks while minimising the impact on the economy.

China will expand domestic demand, boost investment and speed up infrastructure construction, the Politburo said, vowing to ensure smooth transportation, logistics, and supply chains.

On Tuesday, Mr Xi chaired a top-level meeting that announced a big infrastructure push to boost demand, reinforcing Beijing's preference for big-ticket projects to spur growth.

China will strive to keep economic growth within a reasonable range and achieve social and economic targets for 2022, the Politburo said.

Analysts believe more stimulus measures will be needed if the government wants to meet its 2022 growth target of around 5.5 per cent.

"We should accelerate the implementation of policies, implement tax rebates, tax and fee cuts and other policies, and make good use of all kinds of monetary policy tools," it said.

It will also back healthy development of the property market, and ensure stable operations of capital markets, while guarding against systemic risks.