China’s central bank pledged on Wednesday to provide “stronger” policy support for the real economy and maintain a “healthy” real estate market, as a rebound in industrial profits in the country provided more signs of economic stability.
“There will be a focus on expanding domestic demand, boosting confidence, accelerating a healthy economic cycle and providing further support to the real economy,” the central bank said in an online statement on Wednesday.
The central bank held its third-quarter monetary policy meeting on Monday. Her statement came amid questions about China’s business environment and growth prospects abroad.
Monetary authorities also highlighted plans, introduced in early September, to further support China’s faltering property market by implementing the government’s new policies on reducing mortgage loans.
He added that the central bank “will push for stable and healthy development” of a “new model for real estate sector development” by providing financial support for the construction of basic infrastructure, urban villages and social housing.
Why is a weak yuan spurring a retail gold rush in China?
Why is a weak yuan spurring a retail gold rush in China?
At the same time, policymakers tried to make a positive note of the rapid depreciation of the yuan in both internal and external markets.
The Chinese yuan fell to a 16-year low against the dollar in September, approaching the maximum daily reference rate of the People’s Bank of China, which limits the currency’s permissible range to 2 percent on either side, as it fell. To 1.9 percent on Monday of this week.
The depreciation of the currency has raised growing fears of capital outflow, as the Chinese economy shows faltering signs of a real estate decline, as well as weak consumer spending and exports.
The combined profits of medium and large industrial companies – defined as those with annual operating revenues of more than 20 million yuan (US$2.7 million) – recorded their first year-on-year rise so far this year.
August profits were up 17.2 percent from a year earlier, compared with a 6.7 percent drop in July and a 19.2 percent drop in March, according to data released Wednesday by the National Bureau of Statistics.
Reductions in outstanding mortgages may not be enough to boost China’s housing market
Reductions in outstanding mortgages may not be enough to boost China’s housing market
Profits for the January-August period fell by 11.5 percent compared to the same period last year, compared to a decline of 15.5 percent in the first seven months.
State-owned companies saw the decline in their profits narrow from 20.3 percent to 16.5 percent, while the decline in private sector profits narrowed by 6.1 percentage points to 4.6 percent in the first eight months.
August industrial production and retail sales data released by the statistics office earlier this month also indicated initial stabilization for the world’s second-largest economy, encouraging JP Morgan and ANZ to raise their 2023 China forecast to 5.1 percent from 5 percent.