China to publish detailed economic policy steps in early September

BEIJING -China said it would publish detailed steps for newly announced economic policy measures in early September, suggesting an urgency for policymakers to revive the sluggish economy amid a resurgence of COVID and an embattled property sector.

The government will lay out detailed plans to implement the 19 new policies it announced last week to support growth as recent factory activity surveys pointed to a further loss in momentum in the world’s second-largest economy in August.

China will guide commercial banks to provide medium- and long-term loans to key projects and equipment upgrading, state media quoted the cabinet as saying on Wednesday, after a meeting chaired by Premier Li Keqiang.

To prop up the weak property market, China will also support rigid housing demand, state media reported.

“Local governments should have ‘one policy for one city’ to make good use of policy tools” and flexibly use the special loans for home delivery, state media quoted the cabinet meeting as saying.

The latest steps, which include raising the quota on policy bank financing tools by 300 billion yuan ($43.49 billion), come on top of the 33 measures unveiled in May.

China’s economy narrowly escaped contraction in the June quarter due to widespread COVID-19 lockdowns, and economists say its nascent recovery is in danger of fizzling out amid fresh virus flare-ups and a distressed property sector.

The cabinet has also sent working groups to major provinces since late August to push forward the implementation of policies.

“That gives local governments greater autonomy, at the same time asks them to take the responsibility of propping up the property market,” said Wen Bin and Wang Jingwen, senior economists at Minsheng Bank, in a note.

($1 = 6.8977 Chinese yuan renminbi)

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