High-level Chinese delegation to visit North Korea,
BEIJING (Reuters) – China will step up its policy support for the economy amid a tortuous post-COVID recovery, focusing on boosting domestic demand, the Politburo, a top decision-making body of the ruling Communist Party, said on Monday, the state-run Xinhua news agency reported.
The world’s second-largest economy grew at a frail pace in the second quarter as demand weakened at home and abroad, raising pressure on policymakers to deliver more stimulus to shore up post-COVID recovery.
“Currently, China’s economy is facing new difficulties and challenges, which mainly arise from insufficient domestic demand, difficulties in the operation of some enterprises, risks and hidden dangers in key areas, as well as a grim and complex external environment,” Xinhua cited the Politburo as saying.
Top leaders pledged to “intensify macroeconomic policy adjustments, focus on expanding domestic demand, boosting confidence and preventing risks, and continuously promote the improvement of economic operations,” Xinhua said.
China will implement its macro adjustments in a precise and forceful manner and strengthen counter-cyclical adjustments, as the government sticks with a prudent monetary policy and pro-active fiscal policy, the Politburo was quoted as saying.
Separately, Xinhua quoted President Xi as saying during a meeting with non-Chinese Communist Party members that China will strive to achieve its annual development targets.
While China is seen on track to hit its modest 2023 growth target of around 5%, there are risks of the annual goal being missed for the second year in a row, analysts said.
A senior central bank official said earlier this month the bank will use policy tools such as the reserve requirement ratio (RRR) to weather the challenges facing the world’s second-largest economy.
China will actively expand domestic demand, boosting residents’ incomes to unleash the fundamental role of consumption in driving economic growth, while speeding up local special bond issuance to spur investment. Xinhua said.
The government will boost demand for autos, electronics and household products and promote tourism consumption, Xinhua added.
China will adjust and optimise property policies at an appropriate time, in response to “significant changes” in the supply and demand relationship in the property market, Xinhua said.
Amid the mounting local debt repayment burden, China will effectively resolve local government debt risks and formulate a basket of plans to resolve local debt issues, Xinhua said.
A high-level Chinese delegation will travel to North Korea this week, the North’s official KCNA news agency reported on Monday, in the first acknowledged visit of its kind since Pyongyang shut its borders in the wake of the COVID-19 epidemic.
Chinese Communist Party politburo member Li Hongzhong will take part in celebrations marking the 70th anniversary of the end of the Korean War, KCNA reported.
North Korea closed its border in early 2020 to all trade and diplomatic exchanges, even with its main economic and political ally China. Monday’s state media report did not say whether the visit marked any change in policy.
Li, who is also vice-chairman of the Standing Committee of the Chinese National People’s Congress, will visit “to take part in the celebrations for the 70th anniversary of the victory in the great Fatherland Liberation War,” KCNA said.
North Korea refers to July 27 1953, the date when the armistice ending fighting in the Korean War was signed, as victory day. Large-scale events are expected to mark the 70th anniversary this year.
North and South Korea technically remain at war. The North detained a U.S. soldier who dashed over the inter-Korean border last week, landing Washington in a new diplomatic headache over the reclusive, nuclear-armed state.