China said it would release detailed steps for newly announced economic policy measures in early September, suggesting policymakers need to revive the sluggish economy amid a resurgence of COVID and a beleaguered real estate sector.
The government will present detailed plans to implement the 19 new policies announced last week to support growth. Recent factory activity surveys pointed to a further loss of momentum in the world’s second-largest economy in August.
China will guide commercial banks to provide medium- and long-term loans for critical projects and equipment upgrades; state media quoted the cabinet as saying on Wednesday, after a meeting chaired by Premier Li Keqiang.
State media reported that China would also support stiff housing demand to shore up the weak real estate market.
“Local governments should have ‘one policy for one city’ to make good use of policy tools” and flexibly use the special loans for home delivery, state media quoted the cabinet meeting as saying.
The latest steps, including increasing the share of bank policy financing tools by 300 billion yuan ($43.49 billion), add to the 33 measures introduced in May.
China’s economy narrowly escaped contraction in the June quarter due to widespread COVID-19 lockdowns. Economists say its nascent recovery is at risk of fading amid fresh virus outbreaks and a struggling housing sector.
The cabinet has also sent working groups to major provinces since late August to push forward the implementation of policies.
“That gives local governments greater autonomy, at the same time asks them to take the responsibility of propping up the property market,” said Wen Bin and Wang Jingwen, senior economists at Minsheng Bank, in a note.