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Provinces take lead in stabilizing growth

Date: 2022-09-14
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China's major provincial economies are stepping up efforts to stabilize the growth in their regions, with strong focus on expanding effective investment and spurring consumption, as the central government has called on them to take the lead in supporting the country's economy.

Experts highlighted the importance of those economically strong provinces to the nation's overall stable growth, fiscal revenues and employment, saying that investment and consumption will accelerate in those provinces with stimulus policies taking effect in the following months.

China is at a critical juncture for economic rebound, given the impact of insufficient demand and the COVID-19 pandemic, they said, calling for greater efforts to consolidate the foundation of recovery.

Yang Haiping, a researcher at the Central University of Finance and Economics' Institute of Securities and Futures, said economically strong provinces contributed a larger proportion of China's GDP and fiscal revenues, and they have plenty of room to step up policy support for stimulating the economy.

'They will play a key role in implementing the country's stimulus policy measures and stabilizing the overall economy,' he added.

This year, several regional economic powerhouses have announced measures to speed up infrastructure investment and accelerate the construction of major projects.

The South China coastal province of Guangdong has announced that it plans to construct 1,570 key provincial-level projects in 2022, with a total investment of 7.67 trillion yuan ($1.1 trillion) and an annual investment of 900 billion yuan. In the first seven months of the year, it invested 587.1 billion yuan, which is 65.2 percent of the annual investment plan.

According to a newly released document on promoting steady growth in the industry, Guangdong will accelerate the construction of major projects and new infrastructure. The province will advance technological updates of 8,500 industrial companies and build 52,000 5G base stations this year.

Central China's Henan province recently released a plan to accelerate infrastructure construction. It set a goal of implementing 84 major infrastructure projects with a total investment of 137.3 billion yuan by the end of September.

Yang, the researcher, spoke highly of those provinces' moves on stabilizing investment, especially on boosting new infrastructure investment and upgrading manufacturing, saying that more efforts should be made to plan more projects and improve the project management mechanisms.

Yue Xiangyu, an analyst at Shanghai University of Finance and Economics' Institute for the Development of Chinese Economic Thought, said that major economic provinces have sufficient key projects planned and highly developed industrial chains, and thus play a central role in supporting the country's overall growth.

He highlighted certain provinces' moves to step up policy support for expanding investment and boosting consumption, saying these will help support the recovery of demand.

Guangdong has rolled out plans for boosting consumption, requiring efforts to encourage sales of cars, consumer electronics and other industrial products and giving out coupons to stimulate purchasing.

East China's Jiangsu province also released a document recently to further unleash consumption potential, with new measures including stimulating purchases of big-ticket consumer goods, like cars and home appliances, and enhancing the ability to unleash new types of consumption.

Considering the steps by the major economic provinces and a series of stimulus policies on stabilizing the growth, Chen Jianwei, a researcher at the University of International Business and Economics, said the economy will likely rebound in the second half of the year.

To strengthen the foundation of economic recovery, Yue from Shanghai University of Finance and Economics said the government will likely focus on increasing fiscal policy support for infrastructure construction in fields like transportation, energy and logistics as well as new infrastructure.

On the monetary front, he said, monetary easing will remain targeted to support credit to enterprises.

During a recent symposium, Premier Li Keqiang called for a greater sense of urgency to stabilize the foundation of economic recovery. Li said the nation's six economic powerhouses must further tap into the potential of their policies, protect market players and stabilize growth.

The six provinces of Guangdong, Jiangsu, Zhejiang, Shandong, Henan and Sichuan account for 45 percent of China's GDP and contribute more than 40 percent of employment.


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