China’s cabinet pledges stronger policy support to meet growth target By Reuters

China’s State Council signaled a stronger push to stabilize the economy, pledging more forceful counter-cyclical measures to support growth and keep this year’s targets within reach. At a meeting chaired by Premier Li Qiang, officials emphasized tighter execution of existing policies and a faster pace of government bond issuance and deployment to accelerate funding reaching projects and the real economy.

The cabinet called for rapid progress on major infrastructure initiatives tied to the six national networks under the 2026–2030 five-year plan, urging projects to break ground as soon as feasible. The goal is to reinforce investment momentum, bolster consumption, and upgrade the country’s economic structure while sustaining a steady recovery.

Key policy directions

• Strengthen counter-cyclical macro policy to stabilize growth and support economic upgrading.
• Improve the implementation of existing measures and speed up the issuance and use of government bonds.
• Launch major infrastructure projects linked to the six national networks under the upcoming five-year plan.
• Support investment and consumption through interest rate subsidies, infrastructure upgrades, and targeted measures.
• Enhance fiscal spending efficiency and make greater use of remaining local government debt capacity.
• Deploy monetary policy tools flexibly and expand relending facilities for technology innovation, industrial upgrading, agriculture, and small businesses.
• Study additional steps to stabilize the housing market and advance job creation and income growth.

Economic backdrop

The renewed urgency follows signs of moderating momentum. Economic growth cooled to 4.3% in the second quarter. Early in the third quarter, industrial output, retail sales, and fixed-asset investment showed softness, while the property sector remained in a prolonged downturn. Policymakers have reaffirmed an annual growth goal of 4.5%–5% and signaled that additional measures will be introduced as needed and implemented swiftly.

Fiscal and monetary coordination

Authorities highlighted the need for more efficient fiscal outlays that translate quickly into on-the-ground activity. This includes accelerating bond-funded projects, tapping unused local government borrowing capacity where appropriate, and ensuring funds channel to priority areas. On the monetary side, the cabinet backed flexible use of tools to maintain adequate liquidity and credit support, with an emphasis on relending programs to steer financing to innovation-driven sectors, small firms, and agriculture.

Focus on demand, jobs, and housing

To underpin domestic demand, the cabinet plans to combine investment-led support with measures that encourage household spending, including interest rate subsidies and targeted incentives. Additional policies are being studied to stabilize the housing market, strengthen employment, and lift incomes—factors viewed as critical to sustaining a durable recovery.

Overall, the State Council underscored the importance of policy coordination across central and local governments to accelerate project starts, improve policy transmission to businesses and consumers, and ensure that the economy continues to improve while advancing structural upgrades. The cabinet reiterated its determination to work toward achieving this year’s economic and social development objectives.