On June 25, Wang Yiming, member of the Monetary Policy Committee of the People’s Bank of China and vice chairman of the China Center for International Economic Exchanges, said at the quarterly forum of the China Macroeconomic Forum (mid-2022) that it is imperative to stabilize the macroeconomic market. Efforts will be made to achieve positive results in the second quarter, and the economy will be able to stabilize within a reasonable range. As far as macro policy is concerned, proactive fiscal policy needs to be stepped up. For example, whether the deficit level can be appropriately raised and budget adjustments made. It is also possible to consider increasing the issuance of special treasury bonds that are not included in the deficit to further promote the expansion of domestic demand.
Wang Yiming pointed out that there is still a large gap in current supply and demand. Although infrastructure investment has maintained rapid growth under the support of the accelerated issuance of special bonds, it is still constrained by project reserves, fund use, pressure on local fiscal revenue and expenditure, and resolving hidden debts. Therefore, whether infrastructure investment can hedge against the slowdown in real estate and manufacturing investment also depends on the policy strength in the next step.
Wang Yiming believes that the current prudent monetary policy is sufficient in aggregate. The next step is to study the use of discounted interest rates to support financial institutions to carry out consumption and credit business. Consumption is promoted through appropriate subsidies from the government and appropriate concessions from financial institutions to issue low-interest, interest-free consumer credit.
Yang Weimin, member of the Standing Committee of the 13th National Committee of the Chinese People’s Political Consultative Conference and deputy director of the Economic Committee of the National Committee of the Chinese People’s Political Consultative Conference, said at the forum that the current stable growth, employment and prices are facing new challenges. The three sectors of information technology services, real estate, and exports lacked sufficient momentum for recovery. The endogenous characteristics of my country’s economy of strong resilience and great potential have not changed. In the short term, the domestic epidemic has eased, and prevention and control measures have become more precise. Economic development will be back on track, and the pace of economic recovery will be accelerated if there is no large-scale impact of the epidemic in the second half of the year. Yang Weimin suggested that incremental policies should be introduced according to the situation and in accordance with the principles of refocusing, intensifying efforts, and benefiting the long-term.
This article is synthesized from the Securities Times.