Official stresses key role of Xi's economic thought

A visitor interacts with a robot at the 6th World Intelligence Congress held in Tianjin, June 24, 2022. [Photo/Xinhua]

Xi Jinping's economic thought has been playing a significant role in steering the Chinese economy, as it experiences strong resilience with plenty of policy tools to deal with downward pressures, said officials and experts.

He Lifeng, head of the National Development and Reform Commission, said Xi Jinping Thought on Socialist Economy with Chinese Characteristics for a New Era provides scientific and theoretical guidance for China's high-quality economic development and building a modern socialist country in all respects.

He made the remarks at a meeting on Monday in Beijing on the recently published study outline on Xi's economic thought. The meeting was held by the Publicity Department of the Communist Party of China Central Committee and the National Development and Reform Commission.

He highlighted the importance of developing a good grasp of the series of principles, theories and requirements mapped out by the study outline, including remaining committed to a people-centered philosophy of development, building the new economic development paradigm of "dual-circulation", which takes the domestic market as the mainstay while the domestic and overseas markets reinforce each other, promoting high-quality development, insisting on innovation-driven development, actively developing manufacturing and the real economy, and remaining committed to fully expanding opening-up.

According to him, the commission will take effective measures to maintain stable and healthy economic development.

Xi Jinping Thought on Socialist Economy with Chinese Characteristics for a New Era, which was unveiled at the Central Economic Work Conference in December 2017, is mainly based on the new development philosophy put forward by Xi in 2015 and features innovative, coordinated, green, open and shared development.

As the COVID-19 pandemic may still weigh on the global economy and the Chinese economy faces multiple pressures and challenges, Xi's economic thought will continue to provide further guidance and a theoretical foundation for China's economic policy framework, which will help deal with uncertainties and maintain sustained and healthy development, experts said.

Liu Wei, president of Renmin University of China, said that despite facing multiple challenges from the COVID-19 pandemic, international geopolitical tensions and pressures from shrinking demand, supply shocks and weakening expectations, China's economy still enjoys strong resilience and plenty of policy tools to deal with the shocks.

China's economy is gradually shaking off the impact of the pandemic, and improvements are being seen in some key indicators. The official purchasing managers index for China's manufacturing sector rose to 50.2 in June from 49.6 in May, returning above the 50-point mark that separates expansion from contraction, said the National Bureau of Statistics.

Citing policy stimulus, including a new round of 33 detailed policy measures on stabilizing growth which were announced in May, Tommy Wu, lead economist at the Oxford Economics think tank, said his team expected to see a stimulus-driven recovery in the second half of 2022, and infrastructure investment will be the most effective factor in boosting growth.

"Even if some cities or rural areas have been affected by COVID outbreaks, projects in other areas could continue," he said.

"The government is aiming to spend the proceeds of local government special bonds by the end of August. State-owned policy banks will also expand credit to support infrastructure projects. But to roll out further stimulus in the second half, the government will probably need to look for additional sources of funding, such as by issuing special sovereign bonds as it did in 2020."

On the monetary front, he said, the authorities lean toward targeted monetary easing to support small-and medium-sized enterprises, the manufacturing and real estate sectors, and infrastructure financing.

Looking ahead, he said there is room for the People's Bank of China, the nation's central bank, to guide market interest rates and loan prime rates lower, and have one more medium-term lending facility rate cut in the third quarter as broad-based monetary easing through rate reduction could be effective in boosting growth after the economy stabilizes and stimulating credit demand.

The China Macroeconomy Forum said in a recent report that China's economy may grow by 0.8 percent, 6.5 percent and 6.3 percent year-on-year in the second, third and fourth quarters of 2022, and called for greater efforts on spurring growth to meet the annual GDP growth target of around 5.5 percent.