The Politburo, the top decision-making body of the ruling Communist Party of China, has announced that the country will increase its support for the economy. This will be achieved through the use of policy tools such as banks’ reserve requirement ratios (RRR) and interest rates. The decision was made during a meeting chaired by President Xi Jinping and was reported by state media on Tuesday.
Despite challenges in areas such as insufficient demand, pressures on firms, risks, and hidden dangers in key areas of the economy, China’s economic foundation is stable with many advantages and strong resilience. To maintain this stability, Beijing plans to issue ultra-long term special treasury bonds and speed up the issuance of local government special bonds.
In order to support the real economy and reduce overall social financing costs, China will flexibly use policy tools like interest rates and reserve requirement ratios. The country will also work to reduce housing inventories, optimize policy measures for new housing, and continue reforms for small- and medium-sized financial institutions.
Additionally, Beijing aims to promote healthy development in the capital market while deepening implementation of local government debt-risk resolution plans. This will help reduce debt burdens in provinces and cities according to the Politburo.