Premier: Consumption-friendly relief measures should be better utilized

China will adopt policy measures to expand effective demand in order to strengthen economic growth and recovery momentum, according to a decision made at a State Council Executive Meeting chaired by Premier Li Keqiang on Thursday.

It was noted that China's economy is at a crucial stage of stabilization and recovery and that the third quarter is of vital importance. It is essential to efficiently coordinate an effective COVID-19 response with economic and social development, and further deliver policies to stabilize the economy.

There is still ample room to realize the full benefits of policy-backed and development-oriented financial instruments and special-purpose bonds. These measures will help catalyze a large amount of private investment and should be better carried out based on market principles.

Effective investment must be fully utilized to strengthen weak links, facilitate structural adjustments, spur consumption and create jobs so as to leverage its key role in economic recovery and growth.

"The policy-backed and development-oriented financial instruments should help generate physical gains as quickly as possible, and catalyze lending from commercial banks," Li said.

It was decided at the meeting to establish a coordination mechanism promoting effective investment in major projects, with joint administration and parallel review procedures carried out by related departments to ensure consistency and efficiency.

Selected projects should fall within the scope of the 14th Five-Year Plan and other plans, generate economic returns and be launched as quickly as possible. Quotas for land use and energy consumption for major projects will be determined separately in accordance with related regulations. The development of competitive industries will still be fully market-based.

Funds related to policy-backed and development-oriented financial instruments will be efficiently used in accordance with laws and regulations. Greater incentives will be provided and funds will not be simply divided among localities.

It was also noted at the meeting that the use of special-purpose bonds should be expedited to guide commercial banks toward supportive financing. Newly added credit lines among policy banks should be utilized in a timely manner.

Conditions will be created to ensure that operations at construction sites are not suspended and related industrial and supply chains remain uninterrupted in order to generate more physical gains in the third quarter.

Interagency work groups will be sent to localities to supervise and facilitate projects. Management and auditing activities will be strengthened to ensure project quality and prevent corruption.

"During project implementation, consumption-friendly measures and work relief schemes should be used whenever and wherever possible," Li said.

It was also stressed that consumption is closely related to people's lives and should serve as a major engine for growth.

Financial institutions will be encouraged to offer more flexible arrangements for personal consumer loans to help those especially affected by COVID-19. City-specific policies will be adopted to promote the steady and sound development of the real estate sector. People's basic housing needs will be met and their wishes to improve housing conditions will be supported when appropriate.

Specific measures will be introduced for the sound and well-regulated development of the platform economy in order to guide platform companies toward inclusive financial services in keeping with laws and regulations.

The role of the platform economy in creating jobs and spurring consumption will be better realized.