The State Council deploys four major measures to relay and stabilize growth

On July 8th, Premier Li Keqiang presided over a State Council executive meeting to hear a report on the implementation of major policies and measures by the State Council, and resolutely dealt with and rectified those that were not effectively implemented. In the second quarter of this year, our economy stabilized and showed a positive trend in many aspects. Among them, conducting inspections has played a positive role in promoting various departments and localities to implement the major deployments of the State Council, "the Premier said at the executive meeting. Experts say that although the economy has shown signs of stabilization and improvement recently, there is still significant downward pressure. In the early stage, the government introduced a series of stable growth policies, reform measures, and major projects, but the effects were not fully reflected. The State Council emphasizes the implementation of supervision, which can be described as targeted treatment. Whether it is to seize the use of fiscal funds or accelerate project construction progress, it is conducive to increasing effective demand, consolidating development momentum, and it is expected that the economic growth rate will stabilize and rebound in the second half of the year. Focus on rectifying the problems discovered The meeting pointed out that in the past two months, the positive factors in China's economic development have continued to increase, the pace of structural adjustment has accelerated, the fiscal and monetary policies have continued to show effectiveness, the development momentum and risk resistance ability have been enhanced, and there is confidence and conditions to complete the main goals and tasks of economic and social development for the whole year. Further strengthening the implementation of major policies, reforms, and projects is of great significance in ensuring that the economy operates within a reasonable range and promoting quality, efficiency, and upgrading. The meeting listened to the report of the State Council inspection team on the key inspection situation of 18 provinces and 35 departments and units, fully affirmed the proactive and effective implementation of various policies by the Party Central Committee and the State Council in relevant regions and departments, and requested to rectify the problems discovered as soon as possible. The meeting confirmed that firstly, all levels of finance will recover over 250 billion yuan of accumulated and illegal funds, and accelerate the overall allocation for urgently needed areas; The State Council will adjust the 23.9 billion yuan of central budget investment stock funds for major projects under construction; Newly added construction land quotas for the year of ineffective disposal of idle land. The second is to urge and accelerate the construction of railways, rural roads, and major water conservancy projects to ensure the achievement of the annual goals. Support international production capacity cooperation through special bonds and other market-oriented financing. Thirdly, issues related to the integration of agricultural funds, relaxation of the use of housing provident fund, and sharing of government information that have not been fully implemented will be listed and urged for processing. The fourth is to quickly clean up laws, regulations, and normative documents that hinder the progress of reform and the implementation of policies, and accelerate the revision of financial, investment and financing management regulations, as well as market access, product and service standards. Each region should creatively carry out its work based on its actual situation, and each department should strengthen its services to help solve local problems. Hold accountable those who clearly fail to take action or fail to rectify their offers. Establish and improve a regular supervision mechanism to ensure the effectiveness of various policies. During this inspection, some commendable phenomena were discovered. At the same time, some prominent problems and typical cases were also identified, and strict accountability and resolute rectification must be carried out. The Premier said, "We must vigorously implement major policies, reforms, and projects, withstand downward pressure, enhance development momentum, and consolidate the momentum of economic stability and improvement Since May this year, the State Council has dispatched 11 inspection teams, led by the Deputy Secretary General of the State Council and key officials from relevant departments of the State Council, to conduct key inspections on 18 provinces (regions, municipalities) and 35 departments and units. This is the second large-scale inspection action organized by the current government. The impact has significant implications for stabilizing growth The inaction of local governments is considered one of the important reasons for the slowdown in investment growth since the beginning of this year. So this inspection is of great significance for stabilizing economic growth. According to the requirements of the executive meeting of the State Council, the State Council will continue to supervise the key implementation of major policy measures and require timely reporting on the situation, and resolutely deal with and rectify those that are not implemented effectively. From a fiscal perspective, it is required to supervise the relevant measures to stabilize growth, whether they have promoted reasonable and effective investment, expanded domestic demand, and promoted foreign trade development through the leverage effect of finance. In short, the key is to supervise whether valuable public funds resources have been used in various tasks to deepen the reform of the fiscal and taxation system. The reason for making this statement at this time is that the economy is currently in the bottoming out stage and requires strong policy support, and secondly, the gap between fiscal revenue and expenditure is expanding, and we need to live frugally. Through effective supervision, the speed and efficiency of policy implementation will be faster and higher, which is conducive to actively and effectively promoting various tasks of deepening reform Li Quan, a researcher at the Institute of Finance of the Ministry of Finance, told a reporter from the Economic Reference Daily. Gao Yuwei, a researcher at the International Finance Research Institute of Bank of China, told Economic Reference News reporters that the current downward pressure on the economy mainly comes from the significant decline in industrial production and investment activity growth. To stabilize and accelerate investment growth, the first step is to break through the funding bottleneck. The most important thing is to accelerate the allocation of budget funds, supervise the use of key project funds, and activate the existing fiscal funds; Secondly, we need to initiate more investment projects as soon as possible and accelerate the construction of various projects. The State Council emphasizes the implementation of supervision and plays a positive role in both aspects. Zou Shinian, assistant researcher at the National Information Center, believes that this key inspection will help promote the implementation of major policies and the rooting of major projects. He said that many local governments lack awareness of the current downward pressure on the economy or have a weak awareness of actively adapting to the new normal of the economy. Their work is not proactive enough, and coupled with local financial pressure, there are fears and negative emotions towards the implementation of major policies and projects. Through supervision, it can play an important role in giving a strong blow, promoting a profound understanding of the current central policies in various regions and departments, accurately grasping policy requirements, and effectively implementing them. Expected to stabilize and rebound in the second half of the year With the steady progress of inspection work and the gradual effectiveness of a series of measures to stabilize growth in the second quarter, China's economy has shown signs of stabilizing. Multiple judgments suggest that the economy is expected to stabilize and rebound in the second half of the year. Lian Ping, Chief Economist of Bank of Communications, stated that there are some signs of stabilization in the current economic operation: since the beginning of the year, the Purchasing Managers' Index (PMI) for the manufacturing industry has gradually rebounded, showing a counter seasonal trend and maintaining a "weak" expansion trend for three consecutive months; In recent times, the overall electricity consumption in society has increased, medium - and long-term credit has grown rapidly, and some raw material prices have stopped falling and rebounded. The signs of market demand bottoming out and stabilizing have emerged. It is expected that the price level will stabilize in the second half of the year, the pressure of industrial deflation will weaken, the risks of economic operation will decrease, and economic growth may moderately rebound. The economic operation throughout the year showed a trend of initially low and then stable, and was able to achieve the growth target of 7%. In the macroeconomic outlook report for the second half of the year, Liang Hong, Chief Economist of China International Capital Corporation (CICC), predicts that the growth rate of economic activity is expected to further stabilize in the next 2 to 3 months, and show a moderate recovery trend from the end of the third quarter to the fourth quarter, maintaining the forecast of 7%, 7%, and 7.2% year-on-year growth in gross domestic product (GDP) for the second, third, and fourth quarters. Benefiting from the continuous relaxation of monetary policy since April and May this year, the rebound in GDP month on month growth rate is expected to be most significant in the third quarter. According to a research report by Ping An Securities, the GDP growth rates for the four quarters of this year are estimated to be 7.0%, 7.1%, 7.2%, and 7.2%, respectively. The report states that the economic data for May showed a slight trend of economic stabilization, which will become more certain over time. Li Daokui, Director of the Center for China and World Economy at Tsinghua University, believes that the downward trend of the current macroeconomic trend is expected to reverse by the end of this year to the first quarter of next year. The main reason is that the main problem with the Chinese economy in this round lies in China itself rather than the sluggish external market. And China's own economic problems mainly lie in investment, among which the decline in the speed of real estate investment and development is of paramount importance. Based on various analyses, we believe that from the end of this year to the first quarter of next year, with the cyclical adjustment of the real estate market basically in place, the trend of China's macro economy will gradually rise. Of course, this trend analysis may be affected by the huge fluctuations in individual emerging market countries caused by the Fed's interest rate hikes. This international factor may delay the reversal of this downward trend, "he said.