China Vows to Step Up Policy Adjustments amid Challenging Recovery

After a long and difficult recovery from the COVID pandemic, China’s Politburo pledged on Monday to take additional stimulus measures to improve the economy and boost domestic demand.

With domestic and external demand declining, China’s economic growth slowed in the second quarter, putting pressure on policymakers to provide more stimulus to strengthen the post-COVID recovery.

According to the ruling Communist Party’s top decision-making body, the Politburo, China will make further economic policy adjustments with a focus on raising domestic demand, improving confidence, and preventing risks, as reported by the state news agency Xinhua.

The Politburo said China will carry out macro changes “in a precise and forceful manner” and deepen counter-cyclical adjustments while maintaining a reasonable monetary policy and proactive fiscal policy.

Analysts believe China will achieve its modest growth target of around 5% this year, but they also warn that there is a risk of missing the yearly goal for a second year running.

Also, most analysts agree that rising concerns about debt problems mean policymakers are unlikely to give any kind of dramatic stimulus.