China's newly launched financial policies are beyond the market expectation, said an economic expert in an interview with China Central Television (CCTV) on Thursday.
The Political Bureau of the Communist Party of China (CPC) Central Committee held a meeting on Thursday to analyze and study the current economic situation and make further arrangements for economic work. The country should effectively implement existing policies, step up efforts to roll out incremental policies, further make policy measures more targeted and effective, and strive to accomplish the targets and tasks for this year's economic and social development, according to the meeting.
A package of financial policies were also released at a press conference on Tuesday.
Zhu Ning, deputy dean of the Shanghai Advanced Institute of Finance, said that these policies stabilized people's outlook and expectations for the future market.
"First of all, I think this policy package is beyond the market expectations, in terms of the timing and intensity of the launch. This approach may take into account the U.S. Fed interest rate cut on the one hand, to open a window for our policy space. At the same time, we have also seen the growth of domestic asset prices and consumption during this period, which really needs more protection of policies. So from this point of view, I think the policy package has indeed exceeded the expectations of the market, and has also injected some more vitality into the entire market, stabilizing people's outlook and expectations for the future market," said Zhu.
Zhu said the policy of the real estate market is to return houses to the residential purpose and stabilizes social expectations of housing prices.
"First, we can see that real estate, as a special asset, has both the consumption attribute for personal use and the financial attribute of investment or speculation. I think this proposal to stop the decline and stabilize is to a large extent to stabilize the long-term expectations of our households and society for housing prices. Second, I think the focus of stopping the decline and returning to stabilization lies in the word 'stability', and the long-term real estate mechanism still hopes to stabilize the overall housing prices in China, so that people can pay more attention to the residential attribute of real estate, rather than its attribute of investment and speculation. While stabilizing housing prices, it can also stabilize our entire society's expectations of housing prices in the future."
A large number of money is expected to flow to the real economy and the financial and capital market, according to Zhu.
"From the perspective of the real economy, the first is some major investment directions that are most conducive to the national economy and people's livelihood. The second may be some areas with high production efficiency that can bring higher returns to investors. We can also see that the policy pays special attention to supporting and helping small and medium-sized enterprises and small and micro enterprises, because they create a lot of job opportunities. The second aspect, which I think is also an important purpose of the policy, is to stabilize the expectations of the capital market and the real estate market, guide some funds to help the development of the capital market and to stop the decline and stabilize the property market," said Zhu.
The office of the Central Financial Work Commission and the China Securities Regulatory Commission issued a guideline on Thursday to promote the market entry of medium and long-term capital.
"Firstly, for medium and long-term funds, we often refer to corporate annuity, pension and retirement investment plans, which are particularly important for the livelihood of the whole country. Therefore, the guidelines will contribute to China's long-term, high-quality, and sustainable economic development. I think these documents can make an important contribution to the long-term development of China's capital markets and help Chinese households to use their personal accounts to plan for their retirement and elderly care," he said.
China's new financial policies beyond market expectation: expert
