China’s ‘covid zero’ policy is causing a slowdown in economic activity due to lockdowns, rising unemployment, disrupted supply chains and a sluggish economy.
In this context, Chinese Premier Li Keqiang called for “accelerated pace and intensification of efforts in the implementation of macroeconomic policies”.
A member of the Standing Committee of the Political Bureau of the Communist Party of China (CPC) Central Committee, explained at a symposium on stabilizing growth that efforts should be made for “stabilize the growth of market entities and support people’s employment and basic livelihoods, on the basis of stable growth”.
Noting that the new epidemic wave and international disruptions have brought additional downward pressure on the economy, Li Keqiang stressed the importance of confidence for China’s 150 million market entities, strong resilience and generally stable prices. .
“We have always insisted on avoiding ‘flood’ type stimuli. We did not overissue paper money, even as COVID-19 hit us hardest in 2020”announced the Prime Minister, adding that there was still political room for maneuver in the face of new challenges.
Li Keqiang called on local governments to propose more measures in May to bring the economy back to normal quickly.
However, the outstanding debt of Chinese local governments amounted to 30,470 million yuan (about 4,311 million euros) at the end of December 2021, according to official data published in February 2022. A fairly high amount, although the volume was very below the top. limit of almost 33.28 billion yuan decided in 2021 by the country’s top legislature.
China “ensure the full implementation of its relief measures, including reductions and tax refunds, so that companies can quickly and fully benefit from political support“, Mr. Li said.
Emphasis will be placed on employment. Thus, specific measures are planned to help companies stabilize employment, and encourage financial institutions to defer the repayment of interest on loans for micro, small and medium-sized companies and the self-employed.
Regarding the stabilization of the economy, the Prime Minister said that China “It must guarantee adequate grain production and energy supply, and maintain price stability and all the factors that support economic development.”