Policy digest

Financial reforms aim to lower interest rates

China will press ahead with pilot regional financial reforms to effectively bring down real interest rates, according to a statement released after a State Council executive meeting on Wednesday.

It said positive progress has been achieved in some areas in inclusive finance, green finance and more opening up in the financial sector.

It is important to employ multiple tools in a coordinated way to support the development of small and medium-sized banks, and lower financing costs for businesses, especially for microsized, small and private firms, it said, adding that local governments should fulfill their responsibilities while averting financial risks.

Innovation in regional financial reform must be in line with macroeconomic policies, the Cabinet said.

The meeting also underlined the need to set clear objectives and take a coordinated approach in promoting regional financial reforms and innovations.

Authorities will prioritize financial support for major national strategies for regional development, the agricultural sector, technological innovation and further financial opening up.

Proven practices in the pilot reforms will be rolled out to areas where conditions are met.

A working mechanism for regional financial reforms will be established, allowing dynamic adjustments to enhance follow-up evaluation and third-party assessment of the reforms.

It is important to promptly rectify or halt any pilot reform that delivers few concrete results, or seriously deviates from the reform objectives, the statement said.

The State Council said that regions where pilot reforms have met their objectives and delivered notable outcomes will be encouraged to explore new reforms and their practices that can be replicated will be applied in wider areas at a faster pace.

Interministerial body to boost consumption

The central government has established an interministerial joint conference to boost domestic consumption and drive economic growth, according to a notice released by the General Office of the State Council on Tuesday.

The joint conference, comprising 26 central government departments, will work under the leadership of the Communist Party of China Central Committee and the State Council and enable better coordination of the country's efforts to promote consumption, the notice said.

It will also coordinate efforts to analyze and monitor consumption trends and come up with relevant policy suggestions, promote the implementation of consumption-related policies and measures, and solve the problems that arise during the process.

The joint conference should hold meetings as needed, record the minutes, and deliver the printed minutes to related departments, the notice said.

He Lifeng, head of the National Development and Reform Commission, will serve as convener of the conference. Its office, located at the NDRC, will be in charge of the conference's regular work.

Consumption has played a major role in driving China's economic growth in recent years. In the first half of the year, consumption contributed 60.1 percent of China's economic expansion, according to the National Bureau of Statistics.

(China Daily Global 07/30/2019 page5)