Electric vehicles bound for shipment to Europe at the Port of Taicang in Taicang, China. Officials in the National Development and Reform Commission, the country’s economic planning agency, said Tuesday they would speed up spending while largely reiterating plans to boost investment and increase direct support for low-income groups and new graduates. They added that China would continue to issue ultra-long sovereign bonds next year to support major projects and bring forward a 100 billion yuan ($14-billion) investment on key strategic areas originally budgeted for 2025 to this year.
“We are fully confident in achieving the annual economic and social development targets,” Zheng Shanjie, the NDRC’s chairman, told reporters in the government’s first briefing following a weeklong national holiday. He noted that China is facing a more complex environment at home and abroad.
A rally in onshore Chinese stocks on their return from a week-long holiday fizzled quickly as traders questioned Beijing’s resolve to add more stimulus. The benchmark CSI 300 Index was up about 6.4% after surging almost 11%. A gauge of Chinese shares listed in Hong Kong tumbled as much as 11% before paring some losses.
The press briefing is being closely watched for further steps to lift the economy after Chinese leaders signalled a desire to draw a line under the nation’s growth slump. The barrage of measures raised expectations for additional fiscal stimulus worth trillions of yuan to boost confidence, although scepticism lingers over whether they could sustain growth.
China’s leaders aim to achieve around 5% growth this year, but economic data in recent months show that would be hard to reach as consumer spending remained sluggish and a property downturn persisted. Rising trade tensions are also threatening new growth drivers such as exports of electric vehicles.
The NDRC is the latest government body to unveil measures to boost an economy on the brink of a deflationary spiral. Just before the Golden Week holiday, the government unleashed a slew of stimulus measures including interest rate cuts, more liquidity to promote bank lending and a pledge of as much as $340 billion to support the stock market.
The National Day holiday offered tentative signs of a pickup in consumer sentiment, with preliminary figures showing domestic trips exceeding last year’s levels and home sales jumping in major cities.