China to consolidate economic recovery
BEIJING: China will make great efforts to consolidate its economic recovery particularly in the crucial third quarter, puting a priority on stabilising employment and prices, state media reported ater a regular cabinet meeting.
The world’s second-biggest economy narrowly missed a contraction in the second quarter, growing just 0.4 per cent year-on-year, weighed down by COVID-19 lockdowns, a weak property sector and cautious consumer sentiment. The government has set a 2022 growth target of around 5.5 per cent.
Major hurdles in the second half include China’s persistent ZERO-COVID policy that entails curbs and restrictions that could again disrupt local businesses, employment and consumption. To spur growth, authorities have dusted off an old playbook, issuing debt to fund big infrastructure projects.
“We will make great efforts to consolidate the foundation of economic recovery, strive to stabilise the economy and keep the economic operation within a reasonable range, give priority to ensuring the achievement of the goal of stabilising employment and prices,” state media quoted the cabinet as saying.
The nationwide survey-based jobless rate eased to 5.5 per cent in June from 5.9 per cent in May, but youth unemployment hit a record 19.3 per cent. Blue-collar migrant workers were also forced to leave cities and return home due to job losses.
The consumer price index (CPI) rose 2.5 per cent from a year earlier in June, the highest in 23 months, reflecting imported pressures despite China’s domestic price controls.
To fund infrastructure projects and support growth, authorities have given policy banks 800 billion yuan ($118 billion) in new credit quotas and allowed them to issue 300 billion yuan in bonds.
There is still considerable room for policies, such as financing instruments via policy banks, to play a role in boosting investment, the cabinet was quoted as saying.