China’s regulators pledged to boost efforts to stabilize the housing and equity markets, as well as conduct more effective fiscal policies, in the wake of a meeting of top leaders that called for greater stimulus.
The government would promote the recovery of the property market through measures such as increasing demand and controlling the supply of land for new development, China News Service reported, citing Chinese Vice Minister of Housing and Urban-Rural Development Dong Jianguo (董建國) at a conference on Saturday.
The China Securities Regulatory Commission said it would enhance market monitoring for futures and spot trading, and strengthen supervision of margin trading, derivatives and quantitative trading, according to a statement on its Web site.
Photo: REUTERS
The Chinese Ministry of Finance said it would implement more effective and sustained fiscal policies next year, as well as improve macroeconomic regulations.
The government would also increase the issuance and usage of local government special bonds and expand their investment areas, according to a statement on its Web site.
The comments come after officials led by Chinese President Xi Jinping (習近平) vowed to raise the fiscal deficit target next year following a two-day huddle of the Chinese Central Economic Work Conference in Beijing. For only the second time in at least a decade, they made “lifting consumption vigorously” and stimulating overall domestic demand their top priority.
China’s struggling economy has rebounded modestly in recent weeks on the back of more government support, with signs of improvement in consumption and factory activity.
However, overall confidence remains frail because policies have not been strong enough to free the economy from deflation.
In a sign of the challenges facing policymakers, China’s credit expansion unexpectedly slowed last month, figures showed on Friday. Loans extended to the real economy, which exclude those issued to financial institutions, fell to the lowest for the month of November since 2009. That offset elevated government bond issuance to drag down overall credit growth.
More easing is on the cards. China would cut interest rates and the reserve requirement ratio in a timely manner next year, the 21st Century Business Herald reported on Saturday, citing Wang Xin (王信), director of the research bureau under the People’s Bank of China (PBOC).
The central bank would increase the intensity of monetary and credit supply, Wang said at an event on Saturday, according to the report. Financing conditions for the real economy would also be relaxed further, it cited Wang as saying.
The comments came days after the Chinese politburo pledged to embrace a “moderately loose” monetary policy next year.
The central bank would also improve how it manages exchange rate expectations and guard against any shocks next year, a senior official said.
The PBOC would “step up expectation management on exchange rates and vigorously respond to external shocks,” the monetary policy department head Zou Lan (鄒瀾) told state media in an interview published on Friday.
In addition, the central bank would “resolutely prevent risks of overshooting in the exchange rate,” he said.
The yuan has fallen sharply since mid-October and slid on Thursday after a media report said authorities were considering letting it depreciate in response to the threat of a trade war with the US.
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