China’s central government plans widespread inspections to propel second-half economic growth
Photo taken on July 2, 2022 shows the view of a commercial street in Wuhan, central China’s Hubei Province. In recent years, Hubei Province has made efforts to combine its nightlife economy with culture and tourism in an innovative way, thereby enhancing the vitality and attractiveness of nighttime drinking. (Photo: Xinhua)
China’s State Council will hold the ninth round of nationwide inspections in late August, according to an announcement after a senior leadership meeting on Thursday analyzed the current economic situation and set the tone for economic work in the second. semester 2022.
Analysts said the inspection of local governments will focus on the implementation of sets of measures and policies set by the central government aimed at stimulating demand, which is at the heart of China’s economic growth in the second half of the year. .
The State Council, China’s cabinet, on Saturday issued an announcement to solicit proposals in five areas for the ninth national inspection of 19 provinces, with the aim of improving the quality and efficiency of supervision and to ensure that the inspection can actually solve the problems.
According to the document, the inspection will focus on the implementation of policies aimed at stabilizing growth, market entities, employment and people’s livelihoods, supply chains and measures to improve the business environment. The inspection is aimed at accelerating the implementation of policies set out in the Central Economic Work Conference and the government work report and keeping the economy at a reasonable pace, the announcement read.
The purpose of the inspection is to enable micro, small and medium-sized enterprises (MSMEs) to receive policy support, to solve the problem of weak demand, said Hu Qimu, chief research officer at the ‘Sinosteel Economic Research Institute. the Global Times on Sunday.
“The biggest problem China’s economy will face in the second half of the year is weak demand. Demand will eventually trickle down to employment and consumption – the factors that will affect the economy. If demand is weak, companies will struggle to make a profit. If they are not profitable, they will not increase production and recruit. Ninety percent of new jobs in China are created by MSMEs,” said Hu.
According to the central government, a large number of policies introduced earlier this year should be able to stimulate demand. However, at present, demand remains insufficient, as the latest statistics show.
“That is to say, the local governments have a misunderstanding when implementing central government policy, including excessive coronavirus prevention and control measures. Therefore, the central government has decided correct the discrepancy,” Hu said.
The Purchasing Managers’ Index (PMI) for China’s manufacturing sector came in at 49 in July, meaning it fell back into contractionary territory after rising to 50.2 in June, Sunday showed. National Bureau of Statistics (NBS) data. Although the non-manufacturing business activity index and the PMI composite production index remained in expansion territory at 53.8 and 52.5 respectively, they all declined on a monthly basis.
A State Council executive meeting chaired by Premier Li Keqiang on Friday also noted that the central government will roll out new measures to stimulate demand, promote business investment and increase consumption.
A meeting of the Politburo of the CPC Central Committee held on Thursday clarified the tone of work for the second half of the year, with reviving demand as the centerpiece. The meeting stressed that China should improve the stability and competitiveness of China’s industrial and supply chains, and streamline transportation and logistics.
The main policies for the rest of the year will aim to find a solution to the shortage of business liquidity and to strengthen the resilience and competitiveness of Chinese industrial chains, in order to ensure smooth production, which will create more jobs, Wang Dan, chief economist of Hang Seng Bank China, told the Global Times.
She noted that job security was high on the agenda in the second half of the year.
“Despite the new impact of the COVID-19 pandemic in the second quarter, China’s export market share remained high, and exports in automobiles, new energy and other fields rose sharply, becoming an important driver of economic recovery, which reflects the international competitiveness of China’s industrial chain,” said Zhong Zhengsheng, chief economist at Ping An Securities.
Zhong noted that China will continue to actively integrate into global markets and should move faster to achieve deeper regional integration, for example, through more trade and direct investment with countries in ASEAN and RCEP members.
In the first half of this year, the value of exports from merchants on Alibaba.com to RCEP members increased by 30% year-on-year. Of this amount, exports to Indonesia increased by 60% and those to the Philippines increased by 55% on an annual basis, according to a statement sent by Alibaba.com to the Global Times.
Analysts also said housing delivery was a priority in the second half of the year as the property sector will help propel other major industries including steel, cement, furniture and appliances. .