Bonds Mar 17

Recovery tsars to target support for worst-hit sectors 

National Development and Reform Commission says it's yet to exhaust policy tools to repair economy 

by Chris Gill and Xu Yuenai
Recovery tsars to target support for worst-hit sectors
New support measures are aimed at specific industries, including transportation.

(ATF) – China’s National Development and Reform Commission (NDRC) said on Tuesday it will launch new measures to support different sectors at the right time to offset the negative impact of Covid-19 on the economy. 

The NDRC said it will speed up and expand the issuance of special bonds by local governments in China, as ordered by the State Council.

Officials have been told to “quickly issue investment plans in the central budget to support the construction of major projects and key area investments, and urgently release investment in the central budget to support the construction of quarantine units, and expand medical equipment purchase."

That suggests officials are preparing for further Covid-19 prevention and control measures despite the fact China is currently reporting very low infection rates.

Li Hui, deputy director of the Comprehensive Department of NDRC, told a press conference on Tuesday that major economies such as the United States and Europe have recently made substantial adjustments to their macro policies.

China still has a lot of policy tools that can be used and will keep monitoring the situation of its economic trend and launch new supportive measures if necessary, Li said. These measures will be aimed at minimising the negative impact of Covid-19 on the economy and try to complete the nation’s target of forming a moderately prosperous society.

The NDRC said in a statement: “We will implement the decision-making and deployment of the Party Central Committee and the State Council, focus on key areas such as shortcomings (not specified), select investment projects, and give full play to the key role of effective investment. 

"Specifically, it is to accelerate the construction of major projects and infrastructure that have been identified in the national plan, focusing on increasing investment in public health services and emergency material security; strengthening poverty alleviation, transportation energy, major water conservancy, agriculture and rural areas, ecological and environmental protection, and municipal facilities, social and people's livelihood, the reconstruction of old urban areas, and other short-term areas; accelerate the building of new infrastructure such as the 5G networks and data centres; and pay more attention to mobilising private investment.”

In the first two months of this year, the NDRC examined and approved 19 fixed-asset investment projects that will cost 185.3 billion yuan (US$26.5 billion), mainly in transportation, high-tech and other industries.

Among them, the construction of a third runway at Shenzhen Airport to meet air travel demands in the Pearl River Delta region and help to build an international aviation hub in the Guangdong-Hong Kong-Macau Greater Bay Area. 

Top priority: epidemic control

The NDRC’s first priority is ensuring that epidemic prevention and control is in place, as well as adhering to classified guidance, zoning and grading policies, actively and orderly promoting the restart of major investment projects, and coordinating to resolve difficulties and problems in terms of labor, transportation, and raw materials.

The second goal is to further optimise the investment structure – promptly release funds from the central budget, and increase support for the construction of urgently needed projects for the prevention and treatment of infectious diseases such as emergency medical treatment facilities and isolation facilities in affected areas.

The third priority is to expand the scale of special bonds for local governments, step up preparations for special bond projects, and support the construction of infrastructure and public service projects.

The fourth is to strengthen the reform of the investment approval system, strengthening the online approval service for investment projects, and accelerating preliminary work on major projects.

The fifth goal, in accordance with the principles of "funds follow the project" and "elements follow the project", is to coordinate and strengthen the guarantee of funds and land to ensure the solid progress of construction projects.

The NDRC noted that many of these big projects will take years to complete and investment figures released will relate to long-term, not annual figures.

Resumption of production

NDRC spokesman Meng Wei said that as of Tuesday, more than 90% of industrial companies in many Chinese provinces, excluding Hubei, had resumed operations. In some provinces and cities such as Zhejiang, Jiangsu, Shanghai, Shandong, Guangxi and Chongqing, all companies had resumed their operations.   

Since mid-February, the pace of the resumption of companies’ operations had been accelerating, said Mao Shengyong, a spokesperson of the National Bureau of Statistics. 

Due to China’s huge economic scale, a sufficient supply of necessities and the development of the internet economy, the Chinese economy in March had significantly improved from January and February, he said. With its strong and promising macro policy, China was confident about achieving its economic growth target for this year, he said.