China to prioritize employment in fiscal and monetary policies, mobilize existing assets to boost effective investment

China will adopt fiscal and monetary policies that prioritize job creation, as part of efforts to keep overall economic performance stable, according to a decision made at the State Council's Executive Meeting chaired by Premier Li Keqiang on Wednesday.

The meeting also decided to better mobilize existing assets, broaden the channels for private investment and expand effective investment.

"The greater-than-expected impacts from the new round of COVID-19 resurgence and shifting dynamics in the international environment have added new downward pressure to the economy in April. It is imperative to stay confident, face difficulties and challenges squarely, and keep overall economic performance stable, to lay the foundation for coordinated progress on all fronts," Li said.

The meeting stressed that fiscal and monetary policies should be employment-oriented. Tax refunds and breaks, deferred payment of social insurance premiums, reductions in financing costs and other measures should all focus on keeping the operation of market entities stable, keeping payrolls stable and keeping employment stable, to ensure basic livelihoods, stabilize growth and drive consumption.

Various policy tools will be further explored, and local authorities motivated with their due responsibilities well fulfilled, to effectively keep jobs and employment stable.

"We must attach high importance to the work of stabilizing employment. Various support policies should be effectively and speedily implemented to encourage and help enterprises to keep their payrolls stable. Local governments must step up to their responsibilities of supporting market entities and stabilizing jobs. Pro-job policies should be intensified with extended coverage," Li said.

The meeting urged efforts to keep prices stable. China has sufficient supply of essential livelihood products. That said, work in this regard should not be taken lightly. Solid efforts are needed on grain production to ensure stable grain output and supply and strengthen the foundation for price stability.

While ensuring effective COVID-19 response, further efforts will be made to ensure unimpeded logistics, especially in key areas, and safeguard the stability of industrial and supply chains.

The normal supply of energy will be guaranteed. On top of the support provided to electricity producers managed by the central government, including 50 billion yuan (7.43 billion U.S. dollars) in renewable energy subsidies and 20 billion yuan of replenished funds from the state capital operations budget, an additional 50 billion yuan in subsidies and 10 billion yuan from the budget will be made available to support coal-fired power plants in overcoming difficulties and increasing electricity generation.

Measures to expand the coverage and extend the time-frame of the policy for deferred payments of old-age insurance premiums will be promptly explored. Localities will be guided to subsidize the utility bills of micro, small and medium-sized enterprises and self-employed households.

"Price is the most sensitive signal and also the most important lever of the market. We must attach great importance to price stability, food and energy security and the stability of industrial and supply chains," Li said.

The meeting also noted that infrastructure and other existing assets will be put to better use. This will help broaden channels for private investment, boost effective investment and reduce government debt risks.

The mobilization of existing assets through setting up real estate investment trusts and other means will be encouraged. Localities will be guided to introduce demonstrative projects for attracting investment, and all types of investors will be treated as equals.

The market-based operation mechanism will be improved to raise the returns of the projects. New projects invested by recovered funds will be given access to the funding of special-purpose bonds.

The principle of market-orientation and law-based operation will be upheld, and transactions prices will be set in an open and transparent way. The steady operation of infrastructure will be ensured to safeguard public interests.