China has 33 ways to get economy back on track, but critics say ‘adjusting zero-Covid strategy is key’

State Council rolls out broad measures to support businesses and boost demand, in an attempt to offset the economic damage caused by strict coronavirus policy

Even with policy items expected to help ease severity of economic growth slowdown, economists remain cautious on China’s growth prospects for the year

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China’s State Council has unveiled dozens of policy items to stimulate the economy and boost demand. Photo: Bloomberg

Published: 12:00am, 25 May 2022Updated: 9:04am, 25 May 2022

China has unveiled a new round of stimulus measures to stabilise the nation’s faltering economy and support businesses, but analysts say the actual impact may be limited if the nation’s stringent zero-Covid policy remains unchanged.

A 33-point package of policy items will help “get the economy back on a normal track” while keeping major economic indicators within an appropriate range”, the official state press agency, Xinhua, reported following Monday’s regular meeting of the State Council, China’s cabinet.

The announcement by the State Council, chaired by Premier Li Keqiang, came as many analysts have warned that Beijing will be hard-pressed to achieve its economic growth target of “around 5.5 per cent” for the year while sticking with strict coronavirus-control measures.

Extended lockdowns across the country have taken a heavy toll on livelihoods and consumption, putting many people out of work, shuttering businesses and suppressing both supply and demand.

One good thing is that we refrained from … mass stimulus in the past few years, and we still have policy tools in reserve

Premier Li Keqiang

“Power generation, freight volume and bank loans have all declined since April. Without a certain level of GDP growth, stable employment cannot be realised,” Li warned.

“One good thing is that we refrained from excessive money supply and mass stimulus in the past few years, and we still have policy tools in reserve.”

The latest stimulus measures include vows of greater financial relief for more industries via tax refunds, tax cuts and fee reductions.

These will bring the government’s total planned tax refunds and reductions to 2.64 trillion yuan (US$396 billion) for 2022. The lending quota supporting small and micro-sized businesses will also be doubled for banks.