The Politburo meeting of the CPC Central Committee held a few days ago emphasized that macro-policy should take an active role in expanding demand. In the current economic recovery, the problem of insufficient demand is more prominent, and fiscal and monetary policies need to be coordinated to increase adjustment efforts, stimulate investment, boost consumption, effectively make up for insufficient social demand, and promote sustained and steady economic recovery.
In the first half of the year, my country’s economy overcame severe difficulties and challenges, achieved stabilization and recovery, and achieved hard-won results. Fiscal and monetary policies have played an important role in effectively supporting and stabilizing the macroeconomic market. For example, implementing an unprecedented combined tax and fee support policy, especially the tax refund policy, accelerating the issuance and use of special bonds; increasing the implementation of prudent monetary policies , maintain a reasonable and sufficient liquidity, and provide stronger support for the real economy.
At the same time, the current domestic economic recovery foundation still needs to be solid, especially the problem of insufficient demand is still relatively prominent. For example, the recovery of consumption growth is relatively weak, and there are still some difficulties and blocking points in expanding effective investment. The National Bureau of Statistics recently released that the manufacturing purchasing managers’ index in July was 49%, below the threshold. The survey results also show that the proportion of enterprises reflecting insufficient market demand has increased for four consecutive months, and the lack of market demand is the main difficulty facing manufacturing enterprises at present. Regarding the next macro policy, the Politburo meeting of the Central Committee demanded that “fiscal and monetary policies should effectively make up for insufficient social demand”.
In terms of stimulating investment, local government special bonds are an important starting point, and it is necessary to accelerate and effectively use local special bond funds. At present, the issuance of new special bond quotas for project construction in 2022 has basically been completed, much earlier than in previous years. In the next step, the focus should be on converting funds into physical workload, focusing on improving the efficiency of capital use, and capital allocation should not “sprinkle pepper”, but give priority to supporting major projects. At the same time, funds are used as capital for major projects in accordance with regulations, and the leveraging effect of government investment in “four ounces” will be fully utilized to attract more social funds. In addition, in terms of incremental policies, local governments are supported to make good use of the special debt limit.
It is worth mentioning that public-private partnership (PPP) is also an important tool to drive effective investment. In the first half of the year, the size of the PPP market increased steadily, and the contract signing rate and operating rate remained at a relatively high level. In the next stage, this investment model can attract more private capital to participate in the supply of public services in major national engineering projects, revitalize existing assets, rural construction, and water conservancy construction, and play a more prominent role in stabilizing growth and investment. Of course, it is necessary to effectively prevent risks and maintain sustainability in accordance with the requirements of “standardized development and sunshine operation”.
In terms of monetary policy, since the beginning of this year, it has continued to play the dual functions of monetary policy tools in terms of total volume and structure, strengthened the guidance of credit policies, and effectively helped market entities to bail out and develop. In the face of insufficient demand, the next step is to maintain reasonably sufficient liquidity and continue to increase credit support for enterprises. On the one hand, insist on not engaging in “flooding” and not over-issuing currency, and taking into account the balance of stable growth, stable employment, and stable prices; on the other hand, maintaining reasonable and sufficient liquidity and increasing support for the real economy, Maintain a reasonable growth in the money supply and social financing scale, and promote the reduction of corporate financing costs.
According to the deployment, the credit line of policy development banks will be increased by 800 billion yuan, and 300 billion yuan of policy development financial instruments will be established to support medium and long-term infrastructure loans. Making good use of the new credit and infrastructure construction investment funds of policy banks will play an important role in stabilizing investment in the second half of the year. At present, this policy has been implemented. It is necessary to do a good job in project reserves, optimize loan issuance, and guide commercial banks and social funds to follow up to provide financing support, so that more funds can enter infrastructure construction and form a physical workload as soon as possible.
Expansion of consumption is of great significance to boosting social demand and plays a fundamental role in stabilizing growth. Fiscal, taxation and monetary policies should continue to increase efforts to open up consumption blockages. For example, through policies such as reducing vehicle purchase tax, continuing to exempt new energy vehicle purchase tax, and new energy vehicles going to the countryside, automobile consumption has been promoted. Fundamentally, we should continue to vigorously implement the combined tax and fee support policy, phased deferred payment of social security premiums, employment stabilization policies, and increased financial support for small and micro enterprises, etc. Expansion. With stable employment, residents’ income will increase, expectations will also improve accordingly, and consumption will be boosted as a matter of course. (Economic Daily)
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