The main leaders of China have committed themselves to supporting an economy that is facing various risks by managing what is seen as a disordered competition between companies and strengthening capacity cuts in the main sectors in the second half of the year, said the official press agency Xinhua on Wednesday.
The leaders have reported that they will check the price wars among the producers and increase the expectations that Beijing could be about to start a new tour of factories in a long -awaited but demanding long campaign against deflation.
Xinhua quoted a summary of the work of a meeting of the Chinese Politburo, the main decision organ of the Communist Party, whose July meeting defines the economic course for the rest of the year.
The agency said that in the second half of the year, China will maintain a stable economic policy with “flexibility and forecasts”, trying to stabilize employment, companies, market and expectations.
“It seems that there is a slight change towards policies on the side of the question,” said Gary Ng, a senior economist of Natixis.
“The government is also more willing to take measures to combat deflationary pressure and excessive ability in the industrial sector. However, stress has not led the authorities to engage in a more immediate stimulus, since they maintain open options only if necessary.”
China will continue to look for a more proactive tax policy and a “adequately free monetary policy”, showed the summary, but has not mentioned, unlike the April meeting, of the interest rates or mandatory cuts.
Leaders asked for the use of structural monetary policy tools to provide stronger support for technological innovation, stimulate consumption, help small businesses and stabilize foreign trade.
The second largest economy in the world has grown by 5.2% in the second quarter, slightly above expectations, but analysts argue that the weakness of internal demand and the increase in the risks of global trade can induce authorities to adopt multiple stimuli.
China aims at economic growth of about 5% in 2025.
The 15th period of five years (2026-2030) will be crucial for China to achieve economic modernization, since the country’s development environment has to face profound and complex changes, Xinhua said.
The leadership will hold a fourth plenary in October, according to Xinhua. Analysts provide that the meeting focuses on discussions on the new five -year plan.
Source: Terra
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