Chinese policymakers have sent a clear signal to perk up the economy and stabilize the capital market amid a complex external environment and global uncertainties.
The shot in the arm came from a State Council meeting held Wednesday, which urged concrete actions to bolster the economy in the first quarter, noting that monetary policy should take the initiative to cope with the situation, and new loans should maintain an appropriate growth.
The meeting of the financial stability and development committee also made policy announcements on issues of market concern. These include the overall steady economic growth, the real estate sector, platform economy, Chinese shares listed overseas, and the operation of the capital market.
Several regulators moved Wednesday night on the heels of the meeting, pledging thorough implementation of the committee's decisions.
In terms of fostering the real economy, the central bank stressed supporting micro, small- and medium-sized enterprises. The China Banking and Insurance Regulatory Commission pledged to work to meet the financing needs of market entities.
The State Administration of Foreign Exchange said it will improve foreign exchange services, especially for small- and medium-sized enterprises, and guide market players to make wider use of hedging tools for exchange rates and actively guard against and defuse the risks of external shocks.
To allay market worries in Chinese shares listed overseas, the China Securities Regulatory Commission said the country will promptly promote the implementation of new regulations on the supervision of overseas listing of enterprises, support all kinds of qualified enterprises to list overseas, and maintain smooth overseas listing channels.
Relevant departments reiterated that more measures will be coordinated to promote the steady and healthy development of the platform economy and improve its international competitiveness.
A circular, co-released by ten government organs, including the Ministry of Human Resources and Social Security and the Ministry of Education, said that no fewer than 1 million internship posts would be offered to job seekers this year to rev up the employment market.
Given that the economy faces rising pressure from imported inflation caused by price hikes in global commodities, a new wave of COVID infections in China, and growing external uncertainties from regional conflicts, analysts say the policy statement came at the right time to lift market expectations.
"The meeting sent a signal that the central government attaches great importance to steady and healthy economic development, indicating that steady growth remains the current policy priority," said Zhou Maohua, an analyst with the China Everbright Bank.
As the committee has required, relevant authorities will likely actively introduce market-friendly policies and simultaneously prudently introduce policies with a contractionary effect. Meanwhile, issues that draw market attention will be timely responded to, analysts noted.
On Wednesday night, the Ministry of Finance said there are no suitable conditions this year to expand the country's list of pilot cities for real estate tax reform.
The China Banking and Insurance Regulatory Commission also reaffirmed Wednesday the policy stance of upholding the principle of "housing is for living in, not for speculation." The commission will encourage institutions to extend mergers and acquisitions loans and promote the transformation to a new development approach.
Due to its connection with various sectors, the healthy development of the real estate industry is vital to the smooth operation of the economy, said Wen Bin, chief analyst at China Minsheng Bank, in a co-authored article.
In the latest government work report, China set its economic growth target for 2022 at around 5.5 percent, pledging to keep macro policies consistent and enhance their effectiveness.
Economic indicators for the first two months of the year indicated a solid recovery, with the value-added industrial output and retail sales of consumer goods up 7.5 and 6.7 percent year on year, 3.2 and 5 percentage points higher, respectively, than in December last year.
Fixed-asset investment went up 12.2 percent year on year, while investment in property development rose 3.7 percent.
Recent policies have played a positive role in stabilizing and recovering the economy, Wen said, citing signs of improvement seen on both sides of supply and demand.
Against the backdrop of complicated environment, maintaining the stability and consistency of policy expectations is significant for market entities and investors, said Zhao Qingming, a specialist in international finance.
With coordinated fiscal and monetary policies in the works, Chen Li, a chief economist with Chuancai Securities, expected the industries of new infrastructure, new energy, and high-end manufacturing to further drive the economy and enhance its resilience.