The Chinese national flag flies in front of the Foreign Ministry in Beijing on July 26, 2023.
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Zheng Shanjie, chairman of China's National Development and Reform Commission, promised a series of measures to strengthen the country's economy during a highly anticipated press conference on Tuesday.
But he refrained from announcing major new stimulus plans, discouraging investors and weakening the rally in mainland Chinese markets.
China will accelerate the issuance of special purpose bonds to local governments to support regional economic growth, the senior NDRC official said.
Zheng said that ultra-long special government bonds worth a total of 1 trillion yuan have been fully deployed to finance local projects, and he promised that China will continue to issue ultra-long special government bonds next year.
A senior official added that the central government will release a 100 billion yuan investment plan for next year by the end of this month, ahead of schedule.
Zheng also promised that there would be further measures aimed at supporting the property market and boosting domestic spending.
The NDRC head was speaking at a press conference with four other key officials of the country's economic planning agency. The briefing came as the markets came in Mainland China returned from Golden Week, a week-long holiday that began on September 30.
Chinese stocks rose sharply again on Tuesday morning, extending their pre-holiday rally. Major indices in mainland China – the Shanghai Composite Index, the CSI 300 Blue Chip Index and the SZSE Component Index – rose over 10% in early trading.
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Shanghai Composite Index
Last month, China's leaders signaled an urgent need to address a long and painful economic downturn that has cast doubt on the country's ability to meet its annual growth target of “around 5%.”
Ahead of the holiday, Chinese authorities called for stronger fiscal and monetary support at a monthly meeting of senior Communist Party officials and unveiled a series of stimulus measures aimed at halting falling property prices.
The economic boost came as growth in the world's second-largest economy slowed after a disappointing recovery from Covid-19 lockdowns, weighed down by weak domestic demand and a protracted real estate downturn.
In the first half of the year, China's economy grew 5.0% year-on-year, meeting the central government's target, while GDP growth in the April-June quarter missed expectations, rising 4.7%, the slowest growth since the year represents the first quarter of 2023.
China's latest consumer price index rose 0.6% in August from a year earlier, falling short of expectations of a 0.7% gain, while the core CPI, which excludes food and energy prices, rose 0.3% slower increase for the second month in a row.
Amid a barrage of disappointing economic data, factory activity in China also fell for the fifth consecutive month in September, with the official Purchasing Managers' Index (PMI) coming in at 49.8 in September. A PMI reading above 50 indicates an expansion in activity, while a reading below this level indicates a decline.
The Caixin PMI was at 49.3 over the same period, the sharpest decline in 14 months, driven by slowing demand and a weakening labor market.
In March, Zheng told a high-level press conference that China would “continue to strengthen macroeconomic policies.” This would require coordinating fiscal, monetary, employment, industrial and regional policies, he said, as China continues to advance macroeconomic policy adjustment.
The NDRC chief also acknowledged that there are “still many difficulties and problems” in achieving the country's expected growth targets, according to a Mandarin translation of his remarks on CNBC.
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