China to use ultra-long bonds for consumption as retail sales slump
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China’s retail sales grew by 3.7% in the first half of the year from a year ago. CNBC | Evelyn Cheng SHANGHAI — China on Thursday announced its most targeted measures yet for boosting consumption, which has remained lackluster since the Covid-19 pandemic. Authorities announced they would allocate 300 billion Chinese yuan ($41.5 billion) in ultra-long special government bonds to expand an existing trade-in and equipment upgrade policy. The document was jointly published by the National Development and Reform Commission — China’s economic planning agency — and the Ministry of Finance. “There have never been such specific measures” aimed at consumption, Bank of China’s chief researcher Zong Liang said in a phone interview Thursday, according to a CNBC translation of his Mandarin-language remarks. He noted how the new policy links Beijing’s ultra-long bond program — announced in March — with consumption. “This is a very important measure for implementing the Third Plenum,” Zong said. He was referring to a high-level meeting of Chinese leaders last week that only occurs twice every 10 years, and which typically sets the tone for economic policy. The latest Third Plenum concluded with the release of several major guiding documents over the past weekend that reaffirmed Beijing’s long-term interest in bolstering advanced tech. The official communique focused on “deepening reform.” It also said China would work to achieve its full-year national targets, but disappointed many analysts by not indicating major policy changes. Policymakers have started to act in the last week. The People’s Bank of China unexpectedly cut interest rates on Monday, amid other changes, and on Thursday cut its medium term facility lending rate. The National Development and Reform Commission on Thursday then announced the expanded policy to support consumption. “The move is a three-birds-with-one-stone action: Spurring consumption, absorbing industrial output, and [solidifying] economic…
Filed under: News - @ July 25, 2024 11:18 am