China to focus on stable growth in second half

China will keep its economy on a stable and healthy development track with a proactive fiscal policy and prudent monetary policy in the second half of 2018, according to a meeting of the Political Bureau of the Communist Party of China Central Committee yesterday.

The meeting, presided over by Xi Jinping, general secretary of the CPC Central Committee, stressed that China will maintain the basic tone of “seeking progress while maintaining stability” for its economic work and allow the economy to continue to perform within a reasonable range.

Efforts should be made to push supply-side structural reform and win the “three tough battles,” according to a statement released after the meeting.

China’s economy has maintained steady growth with good momentum in the first half, according to the statement.

However, the economy still faces some new challenges and the external environment has changed notably. China should focus on the “principal contradiction” and take targeted measures to solve it, the statement said.

The country will continue to implement a proactive fiscal policy and prudent monetary policy while making policies more forward-looking, flexible and effective. Fiscal policy should play a bigger role in expanding domestic demand and structural adjustments. China will maintain control over the floodgates of monetary supply and keep liquidity at a reasonable and ample level.

Efforts should be made to keep employment, the financial sector, foreign trade, foreign and domestic investments, and expectations stable.

The legitimate rights of foreign-funded companies in China will be protected, according to the statement.

The country should take strengthening areas of weakness as an important task in deepening supply-side structural reform, with intensified efforts to be made in improving infrastructure.

Work should also be done to improve innovation capability, develop new engines of growth, eliminate institutional barriers for cutting excessive capacity, and lower the cost for companies.

The strategy of rural revitalization should be well implemented.

“China must better combine the task of forestalling and defusing financial risks with serving the real economy,” the statement said.

To that end, the country should stand firm on reducing the leverage ratio, ensure the proper policy intensity and tempo, and coordinate the timing of unveiling new policies.

“Through innovation of mechanisms, China must raise the capacity and willingness of financial institutions to serve the real economy,” the statement said.

The meeting called for pressing ahead with reform and opening-up and continuing to roll out major effective reform measures. Major policies of expanding opening-up and significantly relaxing market access should be implemented, and the joint construction of the Belt and Road should be advanced in depth. Efforts should be made to make China’s first import expo, China International Import Expo, successful.