Authorities to have market-friendly measures, in order to “revitalize the economy,” according to the official Xinhua News Agency.
According to officials at a Cabinet meeting led by Vice Premier Liu He. He is President Xi Jinping’s top economic adviser.
Aiming at restoring business and market confidence as the ruling Communist Party tries to recover economic growth.
Since it went down to 4% in the fourth quarter of 2021 from 8.1 percent for the entire year.
The economic collapse was caused by a decrease in construction and property sales. Especially, after Beijing’s crackdown on real estate debt, which officials say is dangerously high.
With anti-monopoly and data-security investigations. Along with multimillion-dollar penalties, and public criticism of e-commerce and other Chinese industries, the private sector is worried about its future.
Xi’s administration has promised to support entrepreneurs who create new employment and income. However, since 2020, restrictions have shaken the private sector, with no sign of when the worry will end.
Wednesday’s announcement did not mention anything about debt, anti-monopoly, and other regulations being over.
However, several economists believe implementation may have risen since the officials made a “policy turn” in December. In order to focus on the shorter-term goal of boosting economic growth.
Meanwhile, in overseas markets, the stock prices of companies such as e-commerce giant Alibaba Group dropped by nearly half. As a result, wiping out more than $1 trillion in market value since the beginning of last year.
“I did speak stop the stock market disaster,” Liu, the vice-premier, said.
“The tone of the meeting is tense, suggesting that policymakers are highly worried about the recent market crash,” they added, noting that Chinese stock markets actually recovered after the news.
The Hang Seng index in Hong Kong rose by 9.1%, while the Shanghai Composite index increased by 3.5 percent.
Alibaba‘s Hong Kong-listed shares increased by 25.8%. Tencent Holdings, the company behind the famous WeChat messaging app, saw its stock rise by 23%. Kuaishou Technology, a live streaming platform, grew by almost 34%.
On the Hong Kong Stock Exchange, the Hang Seng Tech Index for technology equities closed the day up 22.2 percent.
In a study, Stephen Innes of SPI Asset Management said, “These comments don’t mean much individually, but collectively, they signal policymakers won’t remain still.”
Anti-coronavirus measures have also affected the economy by shutting down Shenzhen’s southern business district.
Manufacturing and trade delays are becoming more frequent.
Premier Li Keqiang, China’s No. 2 leader, said, “the government hopes to create as many as 13 million new jobs this year, but that China has many problems and challenges as of now.”
The ruling party is set to fight to meet its official 5.5 percent economic growth goal, which is the lowest since the 1990s, according to experts.
Russia’s attack on Ukraine has pushed up oil and other commodity prices, raising the risk of new trade mishaps just as economies are beginning to recover from the pandemic.