(Bloomberg) — China’s regulators pledged to boost efforts to stabilize property and stock markets and implement more effective fiscal policies, following a meeting of top leaders who called for more stimulus.
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The government will promote the recovery of the property market through measures such as increasing demand and controlling the supply of land for new developments, China News Service reported, citing Dong Jianguo, vice minister of the Ministry of Housing. He spoke at a conference on Saturday.
The China Securities Regulatory Commission said it will improve supervision of the futures market and spot trading, and strengthen supervision of margin trading, derivatives and quantitative trading, according to a statement on its website.
The Finance Ministry said it will implement more effective and sustained fiscal policies next year, as well as improve macroeconomic regulations. The government will also increase the issuance and use of local government special bonds and expand its investment areas, according to a statement on its website.
The comments come after officials led by President Xi Jinping vowed to raise the fiscal deficit target next year following a two-day meeting of the Central Economic Work Conference in Beijing. For the second time in at least a decade, they made “vigorously increasing consumption” and stimulating overall domestic demand their top priority.
China’s troubled economy has recovered modestly in recent weeks thanks to increased government support, with signs of improvement in consumption and factory activity. But overall confidence remains fragile because policies have not been strong enough to free the economy from deflation.
In a sign of the challenges facing authorities, China’s credit expansion unexpectedly slowed in November, figures on Friday showed. Loans extended to the real economy, which exclude those issued to financial institutions, fell to the lowest level for the month of November since 2009. That offset high government bond issuance that slowed overall credit growth.
Greater flexibility is expected. China will reduce interest rates and the reserve requirement ratio in a timely manner next year, the 21st Century Business Herald reported on Saturday, citing Wang Xin, director of the research office of the People’s Bank of China.