Targeted measures to spur growth

Politburo says nation will focus on market-oriented reform to maintain economic growth as it announces fourth plenary session in October

PUBLISHED : Wednesday, 30 July, 2014, 5:21am
UPDATED : Wednesday, 30 July, 2014, 7:20pm

China will use targeted measures to achieve reasonable growth, the ruling Politburo has said.

The government will maintain its monetary policy for the rest of the year, state broadcaster CCTV reported yesterday, quoting a statement released after a Politburo meeting chaired by President Xi Jinping.

The mainland's top decision-making body also announced it would hold the Central Committee's fourth plenary session in October, and that the session would focus on discussing China's efforts in promoting the rule of law, CCTV reported.

The 25-member Politburo said the country would focus on market-oriented reform while it worked to achieve growth for the world's second largest economy.

"Our nation must maintain certain speed in economic growth, otherwise we will not be able to solve many problems," the Politburo said.

China's economic growth has picked up slightly at 7.5 per cent, after it dipped to an 18-month low of 7.4 per cent in the first quarter of the year.

Policymakers and economists are debating whether the government should act swiftly to safeguard its 7.5 per cent target for gross domestic product growth.

Premier Li Keqiang said at a recent cabinet meeting that governments at all levels must ensure that the annual economic target is met.

To maintain economic growth, the government has loosened its monetary policy in recent months by increasing bank lending and lowering the reserve requirement ratio for some small banks.

Policymakers have described the moves as targeted macro policy measures to achieve growth.

The Politburo meeting had met to review the economic operation in the first half of the year and to discuss macro policy for the second half.

It said the government would give top priority to pushing forward the market reform set up by the third party plenum held last November.

"We should work to speed up the promotion of reform, in order to inspire momentum and energy from within the market forces," the Politburo said.

It said the government would continue to focus on domestic consumption as a driver of growth.

It would further cut administrative bureaucracy, deepen reforms to improve investment environment, and further its efforts to liberalise industries dominated by state monopolies, it said.

The Politburo also warned that the economy still faced great challenges and downside risks.

"The economy is still faced with complexities both at home and abroad, with multiple unstable and uncertain factors, and relatively big challenges ahead," the Politburo said.

In a separate meeting, Xi, who is also the Communist Party's general secretary, also warned of challenges the economy faced.

"We must note that the economy is facing some difficulties right now, and we have to pay particular attention to the challenges that could affect our economic development," Xi said.