Supportive government policies will continue to spur domestic demand including investment to facilitate a smooth and steady path of economic recovery, an expert said on Wednesday.
"Government investment has a guiding and driving effect on private capital and facilitates the entry of private capital into the market, which helps to improve overall investment efficiency," said Yang Ping, director of the Investment Research Institute of Macroeconomic Research Institute of the National Development and Reform Commission, at a press salon held by the All-China Journalism Association in Beijing.
The central government has issued a package of incremental policies, promoting economic recovery since late September, especially equipment manufacturing industry, Yang said.
In the fourth quarter of 2024, the sales revenue of the manufacturing industry increased by 3.8 percent year-on-year, 2.4 percentage points higher than the growth rate in the third quarter. Meanwhile, the sales revenue of the equipment manufacturing industry grew by 8.3 percent year-on-year, 4 percentage points higher than the growth rate in the third quarter, data from the State Administration of Taxation showed.
Proactive fiscal policy and accommodative monetary policy are necessary for China's economic recovery and the counter-cyclical adjustment of macroeconomic policy can point out the direction of economic development and promote the stability of economic growth, she said.
"Proactive fiscal policy means a higher deficit ratio, which will help increase the intensity of expenditure and optimize the structure of expenditure. A moderately loose monetary policy can effectively increase economic resilience through the adjustment of interest rates," she said.
The funding of ultra-long-term special treasury bonds will be increased to implement major national strategies and build security capacity in key areas. The special treasury bonds will help fund the industries with products of high market demand and hold huge potential for upgrading, said Yang.
Policies such as optimizing and improving the management mechanism of local government special bonds can also help improve local investment and financing capacity. China's economy is undergoing a comprehensive green and low-carbon transformation, which has a huge demand for investment and room to improve investment efficiency, she said.
Policies will also support urban-rural integration, regional coordinated development, and high-quality economic development and improve the effectiveness of investment, focusing on cultivating new quality productive forces, she added.
Tan Guoling contributed to this story.
