China’s new measures to boost economy

The Chinese government’s recent proposal of follow-up policies to boost the economy has attracted worldwide attention, with foreign media, experts and businesses expecting continuous growth in China.

The State Council of China on August 24 announced 19 follow-up policies to shape greater synergy among the policies already in place. It issued a package of 33 measures in May, covering fiscal, financial, industrial and other fields.

Amid the infrastructure drive, the State Council pledged an addition of over 300 billion yuan ($43.77 billion) in quotas for the policy-based and developmental financial instruments, based on 300 billion yuan of such quotas already in place.

Commenting on the new measures under a combined impact of historic heat and drought in China, Wall Street Journal said that the policies show “how closely the central government is monitoring the matter” in an article titled “China Rolls Out Aid to Help Power Firms and Save Rice Harvest.”

Referring to China’s future growth, Anjani Trivedi, a Bloomberg Opinion columnist, said in her report that “industrial China is alive and well despite concerns of an economic slowdown.”

Though some analysts lowered their projection for China’s growth this year, “Beijing’s priority areas are doing just fine,” Trivedi wrote in the op-ed titled “Don’t Believe the Grim Forecast. China Is Just Fine,” adding that foreign direct investment into China’s high-tech manufacturing increased 3.1 percent in the first half of this year.

In an interview with the Forbes Magazine, Nobel laureate A. Michael Spence said, “China is still doing a lot of things right — they continue to invest heavily in things that have the potential to produce a modern economy.”

Despite that there are pretty headwinds in the short term for the Chinese economy, the medium- to long-term prospects in China are pretty good, Spence added.

Spence’s view was echoed by other scholars. Tan Kong Yam, an economics professor at Singapore’s Nanyang Technological University, told Xinhua that the perspective of China’s economy is quite optimistic in the long run despite a slowdown in the short term.

As a major growth locomotive for the East Asian countries, China’s economic growth is very important to these countries and its economic rebound will contribute to the region’s recovery, Tan said.

A number of executives from international financial institutions have also expressed confidence in China’s economy despite global inflationary pressure and a sluggish economic recovery.