China announces it will step up support for economy, boost markets

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BEIJING (Reuters) – China will step up policy support to stabilize the economy, including its beleaguered internet platforms, as nationwide COVID-19 outbreaks and war in Ukraine heighten risks, a senior official said on Friday. of the ruling Communist Party, lifting the markets.

Chinese policymakers face an uphill battle to stave off an economic slowdown that threatens job losses in a politically sensitive year as COVID-19 lockdowns disrupt supply chains and rattle businesses.

Friday’s state media reports of the much-anticipated Politburo meeting sent Chinese stock prices higher, especially among internet stocks that were battered by last year’s crackdown on the so-called “economy”. platform”.

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China will adopt a set of policies to help industries and small businesses affected by COVID, state media said, citing the Politburo meeting chaired by President Xi Jinping.

“The COVID-19 and Ukraine crisis has led to increased risks and challenges. The complexity, severity and uncertainty of China’s economic development environment have increased,” the Politburo was quoted as saying by the official Xinhua News Agency.

“The stabilization of growth, employment and prices faces new challenges. It is very important to do a good job in economic work and effectively protect and improve people’s livelihoods,” Xinhua reported.

Financial markets have been hit hard over the past two weeks on fears that lockdowns in China could cause serious damage to its economy and derail a global recovery, just as many countries recover from the recession caused by the pandemic. .

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China’s benchmark jumped more than 2%, with the technology-focused STAR50 index jumping more than 4%. Shares of Hong Kong-listed tech companies rose, with the Hang Seng Tech index up more than 7%.

“We should promote the healthy development of the platform economy, complete the special rectification of the platform economy, implement standardized supervision, and introduce specific measures to support the standardized and healthy development of the platform economy.” , Xinhua quoted the Politburo as saying.

Still, the Politburo said authorities would continue to implement the controversial dynamic zero-COVID policy to control outbreaks while minimizing the impact on the economy.

China will increase domestic demand, boost investment and accelerate infrastructure construction, the Politburo said, pledging to ensure smooth transportation, logistics and supply chains.

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On Tuesday, Xi chaired a high-level meeting that announced a big infrastructure push to boost demand, reinforcing Beijing’s preference for big-ticket projects to spur growth.

China will strive to keep economic growth within a reasonable range and meet social and economic goals for 2022, the Politburo said.

Analysts say more stimulus will be needed if the government is to meet its growth target of around 5.5% for 2022.

“We need to speed up policy implementation, implement tax refunds, tax and fee reductions and other policies, and make good use of all kinds of monetary policy tools,” he said. he declared.

It will also support healthy development of the real estate market and ensure the stable functioning of capital markets, while guarding against systemic risks. (Reporting by Kevin Yao and Beijing Newsroom; Editing by Shri Navaratnam and Stephen Coates)

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