An employee works on the assembly line of an automobile manufacturer in Qingzhou, Shandong Province. [Photo by Wang Jilin/For China Daily]

Nation will continue to secure supplies amid rising commodity prices, sectors help

Further policy adjustments are likely underway to solidify China’s economic recovery which remained stable in October, but which has come under emerging pressure from new cases of COVID-19 and a slowdown in the real estate sector, said Monday. officials and experts.

“Greater efforts must be made to maintain a steady economic recovery,” said Fu Linghui, spokesperson for the National Bureau of Statistics.

In particular, the country will strengthen intercyclical macroeconomic policy adjustments, continue to stabilize supplies and commodity prices, and actively help companies facing rising costs, Fu said.

Wang Qian, chief economist for the Asia-Pacific region of the US-based Vanguard Investment Strategy Group, said policymakers should step up targeted supports to small manufacturers and other sectors affected by rising prices of the energy during the rest of the year and the first quarter of 2022.

“Tax breaks and financial assistance are probably in the works. The possibility of reducing the reserve requirement ratio, in a targeted or universal manner, cannot be ruled out,” Wang said.

At the same time, the government can also fine-tune its policy mix for better coordination of policies and implementation results, and correct any exaggerated measures such as some local government regulations on mortgages and restrictions on coal production. Wang said.

Their remarks came after China released a mixed picture of better-than-expected data on industrial production and consumption, but weakening investment led by the real estate sector in October.

China’s industrial production rose 3.5% year-on-year in October, from 3.1% a month earlier, while retail sales rose 4.9% last month, from 4.4 % in September, the NBS reported on Monday.

Growth in capital investment slowed to 6.1% year-on-year in the January-October period, however, from 7.3% in the first nine months. Investments in real estate development, in particular, rose 7.2% over the January-October period, up from 8.8% a month earlier.

Fu said the economic recovery strengthened in October, thanks to the easing of transient pressures such as the spate of local COVID-19 cases and heavy rainfall in the third quarter, as well as increased efforts to increase the supply of energy and raw materials.

“The Chinese economy is expected to recover steadily, with consumer prices rising at a moderate pace,” he said.

Still, uncertainties and unstable factors persist in the international environment as well as structural problems in the domestic economy, making more efforts needed to keep the economy within a reasonable range, Fu said.

Wen Bin, chief researcher at China Minsheng Bank, said more policy measures should be taken to stabilize capital investment and support economic growth.

“We need more data to confirm the acceleration of production and consumption, especially as national cases of COVID-19 increased again at the end of October and could affect production activities and the behavior of consumers in the future, ”Wen said.

Therefore, vehicles such as special local government bonds and the new monetary tool to support carbon emission reductions should be tapped more to fund more investment, Wen added.

Nonetheless, stimuli of considerable magnitude could only be deployed later, as supply constraints such as limits on energy use and disruption of COVID-19 resurgences impact on the economy are relaxed. economic activities, said Wang of Vanguard.

“Stimulus programs aimed at stimulating demand cannot translate into economic growth when supply constraints remain,” she said.

The NBS said China’s polled urban unemployment rate was 4.9% in October, unchanged from September, while the annual target of new urban jobs was met ahead of last month.