China’s premier affirms need for policy speed as stimulus package sets markets ablaze

After last week’s stimulus policies – and subsequent market frenzy – China’s premier has reiterated time is of the essence for fast recovery

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Chinese Premier Li Qiang has said speed is essential for the implementation of policies to spur economic growth. Photo: AP

Published: 6:06pm, 30 Sep 2024Updated: 9:06am, 2 Oct 2024

In the wake of last week’s salvo of stimulus measures – a “policy bazooka” deployed to fast track China’s economic recovery – Premier Li Qiang has urged government departments to implement high-level edicts as quickly as possible.

“[We must] expedite the roll-out and implementation of policies, with those relatively mature launched immediately,” said Li at an executive meeting of the State Council on Sunday. “All departments should not circumvent difficulties or pass the buck, but rather form strong synergy in their work.”

He also called on the government to strengthen coordination through “effective macroeconomic control” and develop “new incremental policies” in response to evolving circumstances.

Li’s comments serve as additional incentive for China’s vast state apparatus to mobilise and meet the annual gross domestic product growth target of “around 5 per cent” – a task made harder by weak domestic demand, distress in the property sector and strains on local government coffers.

To heed this call, the People’s Bank of China and the country’s biggest economic centres have lowered mortgage rates for existing home loans and loosened restrictions on real estate purchases.

Markets have responded in turn, with the Hang Seng Index surging around 2.4 per cent on Monday to hit 21,133.68 at close. Some HK$505.8 billion (US$65.1 billion) in shares changed hands, setting a record for a second business day in a row.