August 31, 2022
BEIJING – Working groups to supervise local-level projects, tackle woes, stabilize growth
The State Council, China’s Cabinet, has sent task forces to certain localities nationwide to expedite implementation of economic stimulus policies, supervise and assist in development work, and help stabilize growth.
China called on major economic provinces to take the lead in supporting the country’s growth amid downward pressures, after key indicators slowed in July. Task forces will help localities to better implement the stimulus package and tackle problems, experts said.
They said China is at a critical juncture of an economic rebound, given the slower-than-expected indicators in July. They also said they expect to see more efforts to consolidate the foundation of recovery.
A recent executive meeting of the State Council announced 19 follow-up measures on top of the policy package for stabilizing the economy. The Cabinet has also sent special working groups headed by ministers to several regional economic powerhouses.
Liu Dian, an associate researcher at Fudan University’s China Institute, said the move became necessary given multiple pressures such as shrinking demand, supply shocks, weakening expectations and uncertainties both at home and abroad. Sending task forces out to assist areas in need of help will strengthen active interaction between the central and local governments, which will help optimize official mechanisms and inject new impetus into the economy.
A supervisory task force headed by Wang Guanghua, minister of natural resources, has already reached East China’s Jiangsu province.
Wang said at a meeting held on Sunday that the task force will work with the local government to speed up the implementation of stimulus policies, strengthen the foundation for recovery and help solve problems in terms of expanding investment and financing, and improving the efficiency of approval mechanisms.
Another team led by Ni Hong, minister of housing and urban-rural development, reached Xiamen, Fujian province. Ni said at a meeting over the weekend that he expects to see more local efforts to stabilize employment, boost investment and spur consumption.
Yi Gang, governor of the People’s Bank of China, the central bank, led another working group to Henan province. Yi said at a meeting in Zhengzhou, capital of Henan, on Saturday that the group will increase support for Henan and said he expects the province will prepare more projects, enhance its capabilities in building projects and raw material supplies, and accelerate the progress of projects.
Feng Jianlin, chief economist at Beijing FOST Economic Consulting Co Ltd, said working groups headed by ministers will develop a better understanding of policy implementation at the local level and thus can adjust and improve policies in a timely manner.
“Since August, COVID-19 resurgences and extreme weather have disrupted power supply, industrial production and crop growth. We estimate that the recovery may continue to lose steam in August,” Feng said, adding he expects to see more monetary easing if the recovery cannot continue in August and September.
A recent meeting of the Political Bureau of the Communist Party of China Central Committee decided that major economically developed provinces should play a leading role in the second half.
During a recent symposium, Chinese Premier Li Keqiang called for a greater sense of urgency to stabilize the foundation of economic recovery. Premier Li said the nation’s six economic powerhouses must further tap into the potential of their policies, protect market players and stabilize growth.
The six provinces of Guangdong, Jiangsu, Zhejiang, Shandong, Henan and Sichuan account for 45 percent of China’s GDP and contribute more than 40 percent of employment.
Liu from Fudan University said the six key provinces play an important economic role, and the intensified government efforts are sending positive signals for stabilizing expectations.
Although facing headwinds, the economy will gradually stabilize with the stimulus package taking effect, Liu said, and he called for more efforts to foster new growth drivers, including ramping up digital economy and boosting environmentally friendly development.