Unsteady global demand and a wobbly Chinese housing market are expected to drag full-year growth to 7 percent in 2015, though many analysts suspect the true figure to be much lower.
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The NDRC also said in the notice that it encourages companies with good credit records to better use funds from overseas markets, especially in equipment manufacturing and projects associated with Beijing’s “one belt, one road” development strategy, as the domestic economy faces downward pressure.
The Ministry of Finance said in July a total of 13.1 billion yuan of idle fiscal funds will be retrieved from central government departments and another 243.8 billion yuan will be recovered from local government departments.
Treasury savings by various levels of government hit 4.44 trillion yuan by the end of August, and savings of other government-affiliated institutions (such as universities, hospitals and research institutes) exceeded 20 trillion yuan by the end of June, according to People’s Bank of China.
China cranked up its fiscal spending by 26 percent in August from a year earlier as Beijing tries to re-energise flagging economic growth and convince reluctant local officials to spend.
China has made moves on the monetary front to rekindle growth, including five cuts in benchmark interest rates since November injecting more funds into the nation’s banking system to boost lending.
USA policymakers are weighing whether unemployment falling to a seven-year low warrants raising rates even as inflation remains below their 2 percent objective.
“The plan has always been expected”, said Cinda’s Gu.
China’s government manages 111 companies centrally under the State-owned Assets Supervision and Administration Commission, or SASAC.
On Monday, Zhang Xiwu, deputy head of SASAC, told a news briefing that China would centralize state-owned capital in key industries, while restricting state investment in industries not in line with national policies. China’s foreign reserves dropped by $94 billion last month, according to Moody’s, as the central bank aggressively defended its currency. He, and the PBOC, if they want to gain the prestige of having the yuan included as a Global reserve currency, should let their stock market correct, allow foreign access to their markets, and let their currency float freely.
The currency is already down 2.6 percent since the beginning of 2015. “China is not a source of risk for the world economy but a source of strength”, said Li.
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The offshore market continues to price in a slight discount however, suggesting expectations persist that the yuan will fall.
