China will strengthen internal stability and confront external instability

A workshop at Songz Automobile Air Conditioning Co. Ltd in Shanghai, east China, April 29, 2022. /Xinhua

A workshop at Songz Automobile Air Conditioning Co. Ltd in Shanghai, east China, April 29, 2022. /Xinhua

Editor’s note: Xin Ge is an associate professor at the School of Public Economics and Administration, Shanghai University of Finance and Economics. The article reflects the opinions of the author and not necessarily the views of CGTN.

President Xi Jinping, who is also general secretary of the Communist Party of China (CPC) Central Committee, chaired a meeting of the Political Bureau of the CPC Central Committee on April 29 to analyze and review the current economic situation and the economic work of the China. .

This meeting highlighted the hard-won gains since the beginning of the year and underlined the importance of synergy between efforts to fight the pandemic and for economic and social development. The meeting urged officials at all levels to take responsibility for preventing and guarding against the “black swan” and “gray rhino” events amidst the complexities, uncertainties and risks caused by the surge of the Omicron variant and the current crisis in Ukraine. Three key instructions from the meeting can be highlighted: stabilizing economic growth, maintaining development security, and maintaining the dynamic zero-COVID approach.

Although China’s GDP grew by 4.8% year-on-year in the first quarter of 2022, the overall external environment is becoming more volatile given the continued impact of a fierce surge from Omicron and the evolution of the Ukrainian crisis. In the United States, the economy contracted at an annual rate of 1.4% in the first quarter, while inflation remained elevated at levels not seen in four decades.

In light of the complexity and uncertainties of the external environment, the meeting emphasized multi-faceted stability for economic development. First, it calls for intensifying the adjustment of macroeconomic policies to keep economic growth within a reasonable range. Established policies will be quickly implemented, including tax refunds and reductions, fee reductions and a range of monetary policy tools. In addition, additional goal-oriented policies will be designed and implemented in a timely manner and given some flexibility.

Second, domestic demand will be expanded. The government will continue to strengthen infrastructure construction and give full play to the driving role of consumption in facilitating economic flows.

Third, the operations of market participants and entities must also be stabilized. It is essential to deploy a relief and assistance package for industries, medium, small and micro-enterprises and the self-employed who have been hit hard by the pandemic.

Fourth, the supply of energy resources and price stability must be ensured, as well as the stability of foreign trade and investment.

A temporary stall selling daily necessities at a community in Chaoyang District of Beijing, capital of China, April 28, 2022. /Xinhua

A temporary stall selling daily necessities at a community in Chaoyang District of Beijing, capital of China, April 28, 2022. /Xinhua

The standard of living of the population must be improved through an adequate supply of essential goods. In the meantime, employment should be stabilized and expanded, workplace safety enhanced, and transportation and logistics ensured unhindered, in order to maintain overall social stability.

The second key instruction mentioned by the Political Bureau is to pay particular attention to the major risks of economic and financial development. As we have already said, “housing is for living in, not for speculating”. Local government will receive variances to improve property policies based on specific requirements. The control of prepayments for convenience housing will be optimized to support a steady and healthy development of the real estate market.

It also seeks to respond more quickly to market concerns. Although the reform of a registration-based IPO system is progressing, long-term investments must be secured to ensure the smooth functioning of the capital market. The meeting also suggests appropriate measures to ensure healthy development of the platform economy.

The restored confidence in the market was evident after the meeting. The benchmark Shanghai Composite Index rose 2.41% to break above the critical 3,000 point level on April 29 and the ChiNext board in Shenzhen also rose more than 4% to 2,319 points. Both markets saw a total of 4,400 stocks rally and more than 300 stocks reaching the upper limit of trading.

Last but not least, the meeting stressed that the dynamic zero-COVID approach remains the best option for China, and the principle of “people first, life first” should be upheld. As a leading Chinese epidemiologist, Liang Wannian, said at a press conference on April 29, a laissez-faire approach to pandemic containment is not appropriate for China due to the lack of full vaccination for the elderly and minors, and uneven medical resources across regions. Liang suggested that adopting the dynamic zero COVID strategy could be seen as “buying insurance for 1.4 billion Chinese people,” noting that it has succeeded in protecting people’s lives and effectively reducing loss of life expectancy per capita.

Liang particularly refuted the claim that China’s adherence to the dynamic zero-COVID approach has “hampered economic growth”, echoing a note from a senior National Health Commission official that Since China has accumulated considerable anti-pandemic experience, practical measures can be refined for the people’s best interests as the situation evolves.

It is evident that China’s achievements in virus policies and measures, and more importantly, people-centered adaptive economic policy adjustments, have been and will continue to be its backbone. post-COVID-19 global economic recovery and Asian economic integration. .

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Shirlene J. Manley