New measures expected to rev up real economy

The Chinese government will launch a slew of new measures to boost real economy development, while further promoting the implementation of real economy supporting policies. [Photo/VCG]

The Chinese government will launch a slew of new measures to boost real economy development, while further promoting the implementation of real economy supporting policies, the Economic Information Daily reported on Tuesday.

Lowering costs and strengthening financial support will be the focus of new polices to be launched by central and local governments, according to the National Development and Reform Commission.

Downward pressure remains in H2, although achievements have been made in real economy promotion in H1 through measures such as VAT rate reduction, targeted RRR cuts and logistics and network cost reduction, the commission said.

Implementing targeted and powerful measures to strengthen areas of weakness and promote real economy development will top the list of priorities in the second half of this year.

The government of Yunnan province announced it would further cut the cost of real economy in ten areas, including taxes, fees, financing costs and logistic cost. The government also proposed over 30 measures to regulate and guarantee the province will reduce 78 billion yuan ($11.46 billion) in real economy cost, in order to provide a better business environment.

The government of Guangdong province has also announced measures to lower costs for the real economy and since the start of this year, the cumulative reduction of electricity and land usage costs has reached 50 billion yuan.

The overall cost cut of real economy is expected to be 1.1 trillion yuan this year, said Zhao Chenxi, head of the bureau of economic operations adjustment under the NDRC.

More options remain in real economy cost cuts and the government will further cut institutional transaction costs to promote the healthy and fast development of the real economy, Zhao said.

The city skyline in Pudong in Shanghai on Aug 19, 2018.[Photo/IC]

In addition to cost cuts, central and local governments are continuing to strengthen financial support to real economy development.

A financial meeting has been held to curb financial risk, improve quality and efficiency of service to the real economy and make arrangements to guarantee sufficient financial support to key projects, the report said.

Financial experts said the combination of preventing and defusing financial risks and better financial service to the real economy remains the focus of policy.

Many banks have also enlarged their lending scale to the real economy, and data shows over 1.45 trillion yuan in new loans were extended in July, up 62 million yuan year-on-year.

Enterprises' expectations are an important part of real economy development and only when expectations are good will small and medium-sized companies dare to invest, finance and enlarge development, said Cao Yuanzheng, chairman of the Bank of China International Research Center.

Measures such as cost cuts and enterprise environment optimization should be taken to boost enterprises' expectations in order to beef up real economy development, Cao said.