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E-mail China.org.cn, December 3, 2024
Hongxing News:
Since the beginning of this year, a series of macroeconomic measures have been introduced, including policies to encourage large-scale equipment upgrades and consumer goods trade-ins (the "two new" policies), adjustments and optimizations for the real estate sector as well as the issuance and effective use of ultra-long-term special treasury bonds and special-purpose bonds for local governments. Can you share how effective these measures have been so far? Thank you.
Sheng Laiyun:
Thank you for your question. In response to the new challenges and situations arising in the economy this year, the CPC Central Committee has made sound decisions and has timely implemented a range of policies to support stable economic operations. As you mentioned, this includes the large-scale equipment upgrades and consumer goods trade-ins, adjustments to real estate policies and the effective use of ultra-long-term special treasury bonds and special-purpose bonds for local governments. Notably, as I mentioned earlier, in late September the country announced a package of incremental policies. These measures have significantly boosted market confidence, with some already taking effect and others being rolled out at an accelerated pace. We will see their impact unfold over time.
Judging by the policies rolled out in the first three quarters, the policy outcomes have been quite remarkable. I'll present some data to support this, which I've summarized as "five things that work."
Firstly, these policies have effectively unleashed domestic demand potential. From a consumption perspective, the appliance and audio-visual equipment retail sales at designated large enterprises grew by 4.4% year over year in the first three quarters. This was bolstered by the trade-in policy. The impact was even more pronounced in September for items covered by the trade-in policy, including cars, home appliances, office supplies and home furnishing. In July, relevant departments issued Several Measures to Enhance Support for Large-Scale Equipment Renewal and Consumer Goods Trade-Ins, allocating approximately 300 billion yuan in ultra-long-term special treasury bonds to implement the "two new" policies. Regions also accelerated the issuance of detailed rules, so these policies positively influenced consumption in September. Retail sales of automobiles increased by 0.4% in September, realizing positive turnaround after several months of decline including a 7.3% drop in August. Retail sales of household appliances and audio-visual equipment grew by 20.5% in September, a significant acceleration of 17.1 percentage points compared to August. Retail sales of cultural and office supplies grew by 10% in September, recovering from a 1.9% drop the previous month. Furniture sales also turned from negative to positive in September. From these aspects, the "two new" policies have had a positive effect on consumption and investment, demonstrating an exemplary effect. To report a figure, in the first three quarters, investment in equipment and tools grew by 16.4% year over year, 13 percentage points faster than the overall investment, driving a 2.1 percentage-point increase in total investment and contributing over 60%.
Secondly, these policies have effectively promoted the production of related industries and products. This is the effect of the "two new" policies from the production side. Let me share a few figures: In the first three quarters, the manufacturing of ships and related devices, broadcasting and television equipment, and communication equipment grew by 20.5%, 19.8% and 12.9%, respectively, with these industries experiencing rapid growth driven by large-scale equipment renewal. The production of food manufacturing machinery, specialized equipment for agricultural product processing and specialized packaging equipment increased by 38.1%, 34.6% and 11.8%, respectively. In the first three quarters, the production of new energy vehicles grew by 33.8% while related charging pile production increased by 57.2%. Household refrigerators, air conditioners and smart TVs also achieved rapid growth.
Thirdly, these policies have effectively supported economic stabilization and recovery. This is a natural outcome, as positive changes on both the production and demand sides have led to improvements in key metrics across industry, services, investment and retail. In September, several production and demand indicators showed marginal improvements, indicating that the economy is stabilizing and recovering.
Fourthly, these policies have effectively improved market expectations. Continuous reinforcement of macroeconomic policies has effectively boosted market confidence, with businesses feeling optimistic about their performance in the fourth quarter. In September, the manufacturing PMI rose by 0.7 percentage point from the previous month and the production index rose by 1.4 percentage points, with business conditions for monitored enterprises across traditional and emerging industries both seeing significant improvements.
Fifthly, these policies have effectively revitalized market activity. From the perspective of financial markets, both the stock market and the real estate market have rebounded, with the stock market showing a clear recovery and real estate transactions becoming more active.
Considering these five aspects, we believe that the series of policies issued by the central government to stabilize growth, the real estate market and market expectations are having a positive effect. Some policies are still being implemented. We hope that local governments will urgently issue corresponding detailed rules to enhance the implementation of these central policies, allowing them to unleash greater potential and consolidate the trend of economic stabilization and recovery. Thank you!
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