(March 30): China’s cabinet vowed to stabilize the economy and moved to reassure financial markets, as the nation of 1.4 billion people battles a Covid surge that’s sent the business hub of Shanghai into a staggered lockdown.
A State Council meeting led by Premier Li Keqiang on Wednesday called on the nation to prioritize stable growth and avoid measures that harm market expectations. Contingency plans should be drafted to deal with possible greater uncertainties, it added, according to state broadcaster CCTV.
The cabinet acknowledged that downward pressure on the domestic economy was increasing, but said China should stick to its annual economic growth target of about 5.5%.
China’s economy came under further pressure in March, as cities and provinces imposed lockdowns and tightened Covid controls to contain infections. A deepening slump in the property market also continues to weigh on growth.
Top financial leaders committed earlier this month to easing regulatory crackdowns, support property and stimulating the economy through monetary policy. However, few concrete steps have been taken. Economists have pushed back their forecast of another cut in banks’ required reserves to the second quarter. A reduction in the interest rate on one-year policy loans is also expected in that quarter, a Bloomberg survey shows.
To expand investment, the cabinet also called for better and faster use of special bonds and pledged to support foreign investment in government bonds, CCTV reported.