BEIJING (Reuters) – China will maintain policy support for the economy, which still faces “downward pressure” and difficulties after better-than-expected first quarter growth, a top decision-making body of the Communist Party said on Friday.
FILE PHOTO: A worker stands on the scaffolding at a construction site against a backdrop of residential buildings in Huaian, Jiangsu province, China October 18, 2018. REUTERS/Stringer/File Photo
The statement from the politburo came two days after China reported had steady 6.4 percent annual growth in January-March, defying expectations for a further slowdown, as industrial production jumped sharply and consumer demand showed signs of improvement.
“While fully affirming the achievements, we should clearly see that there are still many difficulties and problems in economic operations,” the official Xinhua news agency reported, citing a politburo meeting chaired by President Xi Jinping.
“The external economic environment is generally tightening and the domestic economy is under downward pressure.”
China will implement counter-cyclical adjustments “in a timely and appropriate manner”, while the pro-active fiscal policy will become more forceful and effective, and the prudent monetary policy will be neither too tight nor too loose, it said.
For this year, the government has unveiled tax and fee cuts amounting to 2 trillion yuan ($298.35 billion) to ease burdens on firms, while the central bank has cut banks’ reserve requirement ratios (RRR) five times since early 2018 to spur lending.
Further policy easing is widely expected.
On Friday, the politburo reiterated that the government will effectively support the private economy and the development of small- and medium-sized firms.Authorities will strike a balance between stabilizing economic growth, promoting reforms, controlling risks and improving people’s livelihoods, the politburo said.
China will push forward structural deleveraging and prevent speculation in the property market, it said.
“We should adhere to the orientation that houses are used for living, not for speculation,” the politburo said, reaffirming a city-based approach in controlling the property sector.
China’s economic growth is expected to slow to a near 30-year low of 6.2 percent this year, a Reuters poll showed last week, as sluggish demand at home and abroad weigh on activity despite a flurry of policy support measures.
(This story has been refiled to show the politburo is a top, not the top, body, paragraph 1)
Reporting by Beijing Monitoring Desk and Kevin Yao; Editing by Richard Borsuk