Hong Kong Chinese leaders said they would take more aggressive measures to boost consumer spending and stave off a worsening set of economic challenges, signaling growing concern about slowing momentum in the world’s second-largest economy.
Chinese leaders said they would take more aggressive measures to boost consumer spending and stave off a worsening set of economic challenges, signaling growing concern about slowing momentum in the world’s second-largest economy.
The 24-member Politburo, the Communist Party’s top policy body, promised further measures to boost household incomes and cut financing costs for businesses, but a report by the state-run Xinhua News Agency gave few details of the plan.
The 24-member Politburo, the Communist Party’s top policy body, promised further measures to boost household incomes and cut financing costs for businesses, but a report by the state-run Xinhua News Agency gave few details of the plan.
The Politburo meets about four times a year to discuss economic policy, and Tuesday’s meeting, as expected, laid out short-term measures to complement the longer-term economic policies and other priorities outlined at the country’s biannual Third Plenary Meeting last week.
Amid signs that this year’s economic recovery is slowing, the People’s Bank of China has already joined the fray, implementing a series of unexpected interest rate cuts last week in its biggest monetary easing so far this year.
Tuesday’s meeting, chaired by party chairman Xi Jinping, offered no theoretical changes on how to tackle China’s thorniest problems, particularly the crisis-hit real estate sector and hidden local government debt that is stymieing growth.
Bruce Pan, China economist at Jones Lang LaSalle, said the Politburo’s assessment of the Chinese economy took a “more pessimistic” tone than when officials released second-quarter growth figures two weeks ago. The Politburo’s pessimistic tone suggests more policy support and stimulus could be on the way.
China’s economy slowed sharply in the second quarter of this year, with gross domestic product growing just 4.7% from a year earlier, below economists’ expectations.
Second-quarter GDP growth showed that manufacturing investment and exports led the growth, while weak consumer spending and a still-sagging real estate sector were major drags.
Communist party leaders at a Politburo meeting on Tuesday focused on boosting consumption, stressing the importance of boosting domestic demand, Xinhua reported. Leaders also pledged to support consumption in industries such as culture and tourism, elderly care and housekeeping, but did not provide details.
He also hinted at efforts to tighten regulations to tackle inefficient production and excessive competition in industry as China grapples with an excess capacity problem that is causing trade frictions overseas.
Investors seemed less than impressed by the meeting: The CSI 300 benchmark index closed down 0.6%, while Hong Kong’s benchmark index was down 1.5% by mid-afternoon.
Xiao Xiao and Grace Zhu contributed to this article.
Write to Rebecca Feng at [email protected]
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