Unusual Politburo Meeting on Stimulating Chinese Economy
Unusual Politburo Meeting on Stimulating Chinese Economy
Transcript and Key Takeaways
I was thinking about updating one later this week… but it’s so important that I just can’t miss it…
On September 26, the Chinese Politburo convened a meeting to analyze the current economic situation. Typically, there are three such economy-focused Politburo meetings annually, held at the end of April, July, and December. However, this third meeting being scheduled for the end of September is highly unusual and requires additional attention.
PS: China's A-share increased 3.5% today, quite a good reflection
Key Points of the meeting transcript:
How they view the economic situation in general
当前经济运行出现一些新的情况和问题。要全面客观冷静看待当前经济形势，正视困难、坚定信心，切实增强做好经济工作的责任感和紧迫感。
At the same time, some new situations and problems have emerged in the current economic operation. It is necessary to comprehensively, objectively, and calmly view the current economic situation, face difficulties, maintain confidence, and effectively enhance the sense of responsibility and urgency in doing economic work well.
Sequence Matters
In Chinese official documents, the sequence of words also conveys information, reflecting the relative importance or priority of different initiatives. In the official transcripts outlining future macroeconomic policy, Fiscal policy was put at the top, ahead of monetary policy. In my opinion, this positioning suggests that government spending is likely to play a leading role in the upcoming economic strategy. This implies that the central government is increasing leverage and expanding the fiscal deficit. Hoping these measures could be used to expand social welfare and increase income for low-income groups.
会议强调，要加大财政货币政策逆周期调节力度，保证必要的财政支出….
The meeting emphasized the need to increase counter-cyclical adjustment of fiscal and monetary policies, ensure necessary fiscal expenditures….
要发行使用好超长期特别国债和地方政府专项债，更好发挥政府投资带动作用。要降低存款准备金率，实施有力度的降息。
It called for issuing and using ultra-long-term special treasury bonds and local government special bonds well, to better leverage the role of government investment. The meeting also called for reducing the reserve requirement ratio and implementing significant interest rate cuts.
“significant interest cuts.” I haven't seen that kind of strong pronunciation before.
A Boost to the Real Estate Market
要促进房地产市场止跌回稳
It stressed the need to promote the stabilization of the real estate market
It suggests that Politburo believes the real estate market has already experienced an excessive decline. In terms of measures to boost:
要促进房地产市场止跌回稳，对商品房建设要严控增量、优化存量、提高质量，加大“白名单”项目贷款投放力度，支持盘活存量闲置土地。要回应群众关切，调整住房限购政策，降低存量房贷利率，抓紧完善土地、财税、金融等政策，推动构建房地产发展新模式。
strictly control new construction of commercial housing, optimize existing stock, improve quality, increase loan issuance for "whitelist" projects, and support the revitalization of idle land stock. In response to public concerns, the meeting called for adjusting housing purchase restriction policies, lowering interest rates on existing mortgages, and promptly improving land, fiscal, and financial policies to promote the construction of a new model for real estate development.
Other
Private Sector:
It called for the introduction of a law to promote the private economy and create a favorable environment for the development of the non-public sector.
The law on boosting the private sector has been talked about since early this year.
Consumption& Social Welfare:
The meeting stressed combining consumption promotion with people's welfare, promoting income increases for middle and low-income groups, and upgrading consumption structure. It called for cultivating new types of consumption patterns, supporting and regulating social forces in developing elderly care and childcare industries, and promptly improving the childbirth support policy system.….
Employment:
focusing on employment work for key groups such as recent college graduates, migrant workers, people lifted out of poverty, and zero-employment families. It called for strengthening assistance for groups facing employment difficulties, such as older individuals, people with disabilities, and long-term unemployed. The meeting emphasized strengthening assistance for low-income populations
For Full Transcript:
Source: https://www.gov.cn/yaowen/liebiao/202409/content_6976686.htm
On September 26, the Political Bureau of the CPC Central Committee held a meeting to analyze and study the current economic situation and plan the next steps for economic work. Xi Jinping, General Secretary of the CPC Central Committee, presided over the meeting.
The meeting acknowledged that since the beginning of this year, the CPC Central Committee, with Comrade Xi Jinping at its core, has united and led people of all ethnic groups across the country to overcome difficulties and respond calmly. They have increased macro-control efforts, focused on deepening reform and opening up, expanding domestic demand, and optimizing economic structure. The economy has been generally stable with progress, new quality productive forces have been developing steadily, people's livelihoods have been solidly protected, positive progress has been made in preventing and resolving risks in key areas, high-quality development has been steadily advanced, and overall social stability has been maintained.
The meeting pointed out that the fundamentals of China's economy and favorable conditions such as a vast market, strong economic resilience, and great potential have not changed. At the same time, some new situations and problems have emerged in the current economic operation. It is necessary to comprehensively, objectively, and calmly view the current economic situation, face difficulties, maintain confidence, and effectively enhance the sense of responsibility and urgency in doing economic work well. We should focus on key areas, take initiative, effectively implement existing policies, introduce additional policies with greater effort, further improve the targeting and effectiveness of policy measures, and strive to complete the annual economic and social development goals and tasks.
The meeting emphasized the need to increase counter-cyclical adjustment of fiscal and monetary policies, ensure necessary fiscal expenditures, and effectively carry out the "three guarantees"（Ensure wages, ensure operation, ensure basic livelihood）work at the grassroots level. It called for issuing and using ultra-long-term special treasury bonds and local government special bonds well, to better leverage the role of government investment. The meeting also called for reducing the reserve requirement ratio and implementing significant interest rate cuts. It stressed the need to promote the stabilization of the real estate market, strictly control new construction of commercial housing, optimize existing stock, improve quality, increase loan issuance for "whitelist" projects, and support the revitalization of idle land stock. In response to public concerns, the meeting called for adjusting housing purchase restriction policies, lowering interest rates on existing mortgages, and promptly improving land, fiscal, and financial policies to promote the construction of a new model for real estate development.
The meeting emphasized efforts to boost the capital market, guide medium and long-term funds into the market, and remove obstacles for social security, insurance, and wealth management funds to enter the market. It called for supporting mergers and acquisitions of listed companies, steadily advancing the reform of public funds, and studying and introducing policy measures to protect small and medium-sized investors.
The meeting pointed out the need to help enterprises overcome difficulties and further standardize law enforcement and regulatory behaviors related to enterprises. It called for the introduction of a law to promote the private economy and create a favorable environment for the development of the non-public sector. The meeting stressed combining consumption promotion with people's welfare, promoting income increases for middle and low-income groups, and upgrading consumption structure. It called for cultivating new types of consumption patterns, supporting and regulating social forces in developing elderly care and childcare industries, and promptly improving the childbirth support policy system. The meeting also emphasized increasing efforts to attract and stabilize foreign investment, promptly advancing and implementing reform measures such as foreign investment access in the manufacturing sector, and further optimizing a world-class business environment based on market principles, rule of law, and international standards.
The meeting stressed the importance of maintaining the bottom line of people's livelihoods, focusing on employment work for key groups such as recent college graduates, migrant workers, people lifted out of poverty, and zero-employment families. It called for strengthening assistance for groups facing employment difficulties, such as older individuals, people with disabilities, and long-term unemployed. The meeting emphasized strengthening assistance for low-income populations and ensuring the supply and price stability of important goods such as food, water, electricity, gas, and heat. It stressed the importance of food and agricultural production, caring for farmers' income increases, and ensuring national food security.
The meeting required all regions and departments to earnestly implement the decisions and arrangements of the CPC Central Committee, prioritize action, unite in purpose, and fully mobilize the enthusiasm, initiative, and creativity of the whole society to promote high-quality development and drive the continuous upturn of the economy. Party members and cadres were urged to be brave in taking responsibility and daring to innovate, improving their capabilities and achieving results in overcoming difficulties. The meeting called for setting good standards for selecting and appointing personnel, earnestly implementing the "three distinctions," supporting those who take responsibility, and backing those who work hard. It emphasized supporting economically strong provinces to take the lead and play a better role in driving and supporting the economy.
The meeting also discussed other matters.