China says it will beef up policy reserve to tackle economic challenges

A state planner official said on Tuesday that China will roll out tools in its policy reserve to deal with more economic challenges as COVID 19 outbreaks and the risks from the Ukraine crisis pose a threat to employment and price stability, but there are still headwinds, such as a downturn in April and early May, and the risk of more COVID 19 outbreaks.

The government will implement its existing support measures while improving its policy toolbox, according to Ou Hong, deputy secretary general at the National Development and Reform Commision. He said that policy support can be rolled out in a timely manner, depending on the circumstances.

We are fully confident in overcoming the difficult challenges in economic operation and we have the ability to cope with all kinds of unexpected changes to ensure stable, healthy and sustainable economic development, according to Ou.

Ou acknowledged that the outbreaks of COVID 19 and the Ukraine crisis in March have threatened to undermine growth and cause unemployment and inflation.

The government has reiterated in recent years that it will not resort to flood-like stimulus, a position that was reiterated by Zhao Chenxin, a vice director at NDRC, at the same time.

People's Bank of China Governor Yi Gang was quoted by state media as saying that China's monetary policy will continue to be accommodative to the economic recovery.

In May, China's cabinet announced a series of measures covering fiscal, financial, investment and industrial policies to deal with the COVID-induced damage to its economy.

The policies underscore the government's determination to prop up its economy, but analysts say that a 5.5 per cent target for growth will be hard to achieve if China sticks to its zero-COVID containment strategy.