Following a recent meeting of the Politburo of the China Central Committee, which set priorities to maintain stable employment, businesses, markets and expectations, the relevant government organs have accelerated the deployment of coordinated policies to strengthen trust and maintain momentum.
In the latest episode of China’s Economic Roundtable, an entire media talk show hosted by Xinhua’s news agency, as well as officials from the country’s top economic planners, labor bureau and central banks outlined that the expanding policy toolkit will allow China to manipulate and strengthen the foundations of long-term growth.
Guests will be taking part in the latest episode of China Economic Roundtable, a full-scale media talk show hosted by Xinhua News Agency. (Xinhua/Jin Liwang)
Macro Policy Support
The country’s economy was resilient for the first four months, with strong growth in industrial production, services, domestic demand and exports. Official data showed that retail sales of home appliances and communications equipment rose more than 20% during the period, and investment in purchased equipment increased by 18.2%.
Innovation picked up a pace, with high-tech manufacturing increasing 10% year-on-year in April, leading to rapid advances in new energy vehicles, large-scale AI models and humanoid robots.
The 200,000th vehicle of Chinese NEV brand Voyah will unveil the assembly line in Wuhan, Hubei Province, central China, on April 9, 2025 (Xinhua/Wu Zhizun)
Din Lin, a member of the National Development and Reform Commission, said the bright economic data reflects the combined effects of accelerated developments in target measurements and recent policy initiatives.
A 0.5 percentage point reduction in the reserve requirements ratio for eligible financial institutions came into effect in mid-May, injecting approximately 1 trillion yuan (US$139 billion) into long-term liquidity. On May 8th, it was followed by a 0.1 percentage point cut with an effective seven-day reverse report.
These moves, along with the expanded relending tools and issuance of Sci-Tech bonds, form part of a broader push by financial and financial regulatory agencies, supporting a stable market and recovery amidst external headwinds.
“These policies will help reduce the funding costs of the actual economy, particularly the small and medium-sized enterprises (SMEs), and ensure more stable business operations,” said Ding Zhijie, head of the People’s Bank of China Institute.
Ding Ziji, head of the People’s Bank of China’s Institute, speaks on the central bank’s latest episode record site of China Economic Roundtable, an all-media talk show hosted by Xinhua News Agency. (Xinhua/Jin Liwang)
Official data shows adequate market liquidity and substantial credit support for small and medium-sized businesses.
By the end of April, outstanding balances of comprehensive loans to micro and small businesses increased by 34.3 trillion yuan, an 11.9% year-on-year, surpassing growth in all other loan categories over the same period.
The loan to “Little Giant” companies, referring to the new elite among Chinese small and medium-sized enterprises engaged in manufacturing, specializing in niche markets and boasting cutting-edge technology, stood at 6.3 trillion yuan by the end of the first quarter, showing a 15.1% increase.
Domestic demand rises
China has introduced a series of target measurements in multiple sectors to enhance domestic demand as a key driver of growth.
These include expanding service consumption, strengthening care for older people with disabilities, promoting automobile sales, improving consumption-related infrastructure, promoting private investment, and launching new policy-based financial products.
The central bank has introduced a package of structural monetary policy to boost domestic demand, including expanding the re-lent facilities for innovation and technology upgrades from 500 billion to 800 billion yuan. Sci-Tech Innovation Bonds.
Ding Zhijie said the central bank’s recent policy focuses on three key aspects: expanding existing tools, reducing funding costs, and introducing innovative equipment that will guide funding into key areas of consumption and investment.
The country expanded the program’s scope earlier this year by unveiling a new round of consumer goods trade-in programs last year to promote consumer spending and encourage subsidies for automobile trade, appliances and home decoration.
Customers choose a dishwasher at a shopping mall in Qingdao, Shandong Province, East China on January 8, 2025 (Photo: Zhang Ying/Xinhua)
In the first five months of this year, the country’s consumer goods trade-in program generated 1.1 trillion yuan on sales, driving a surge in transactions that include digital products such as 4.12 million vehicles, 77.62 million home appliances and 56.3 million mobile phones.
Stable employment
As domestic demand recovers and macro policies take effect, employment is generally stable.
Students will speak to employers (R) at a campus employment fair held at Wenshan University in Yunnan Province, southwestern China on April 9, 2025 (Photo: Xiong Pingxiang/Xinhua)
From January to April, employment creation in urban areas increased at a steady pace, with the average surveyed urban unemployment rate of 5.2%.
Chen said the ministry has introduced a series of targeting measures to stabilize jobs, which have resulted in positive results.
The state has fully unlocked policy dividends by increasing loan allocations aimed at stabilizing and expanding employment, expanding subsidies coverage to support job creation, and expanding existing measures such as unemployment insurance reimbursements and skill training subsidies.
In the first quarter, 35.2 billion yuan for employment stabilization funds were issued, with 23.8 billion yuan for employment subsidies and 156.3 billion yuan for special demonstration loans for job retention and expansion.
Starting this year, more than 10 million people will benefit from the vocational training programme that has been subsidized for the third year in a row, along with specialised courses in elderly care, national services and long-term care to improve workforce skills.
Authorities said more efforts will be made to increase the foresight, accuracy and effectiveness of macro regulations, and to ensure that all policies work in the same direction and are strengthened against each other.
Such coordinated efforts are expected to support the momentum of the economy’s upward trend, strengthen market confidence and improve resilience to increasing global uncertainty, they said.
Reissued by Xinhua News Agency