On November 23, according to the Central Television Network, Premier Li Keqiang of the State Council presided over an executive meeting of the State Council on the 22nd, which deployed a package of policies and successive measures to stabilize the economy and take effect in an all-round way, so as to consolidate the foundation for economic stability; decided to send a supervisory working group to the local authorities to promote the effective landing of policies and measures in the early stage.

The meeting pointed out that it is necessary to thoroughly implement a package of policies and measures to stabilize the economy, keep the economy running within a reasonable range, and strive to achieve better results. In the early days, fiscal and financial policies were introduced to support the construction of major projects and the renovation of equipment, and the policy effect is emerging, and there is still great potential. At the same time, there are differences in local conditions, and some of them have not been put in place, so we should continue to pay close attention to implementation.

The meeting deployed six tasks, among which the statement of the meeting on financial support for the real economy is worthy of attention. The meeting mentioned that timely and appropriate use of monetary policy tools such as reserve requirement reduction to maintain reasonable and adequate liquidity.

The meeting also stressed the need to strengthen supervision and services. Before the end of November, various supervisory working groups of the State Council went to relevant places to supervise the implementation of a package of policies and measures to stabilize the economy and to coordinate and solve difficulties and problems in policy implementation.

After the news of the National standing Committee, Chinese assets rose across the board, with Hang Seng Index futures up 0.9% as of 9: 00 p.m., and FTSE A50 China Index futures up 0.4%. Most popular US-listed stocks also rose before trading, with Bilibili Inc., KE Holdings Inc., JD.com, BABA and Pinduoduo up more than 3 per cent and Li Auto Inc. nearly 3 per cent.

The National standing Committee has deployed six new tasks.

The meeting pointed out that the current is a key point in time to consolidate the foundation for economic stability. It is necessary to thoroughly implement a package of policies and measures to stabilize the economy, keep the economy running within a reasonable range, and strive to achieve better results.

Six tasks were deployed at this meeting:

Encourage commercial banks to issue new Baojiaolou loans

In terms of stabilizing and expanding consumption, the meeting proposed to promote special loans for Baojiao buildings to the project as soon as possible, encourage commercial banks to issue new loans for Baojiao buildings, and promote the healthy development of the real estate market.

The real estate industry is related to many upstream and downstream industries, and its virtuous circle is of great significance to the healthy development of the economy. According to Yi Gang, governor of the people's Bank of China, in response to the late delivery of houses caused by the risk exposure of some housing enterprises in the previous period, the people's Bank of China has issued a special loan of 200 billion yuan to support the construction and delivery of houses sold, and studied the establishment of structural policy tools to encourage commercial banks to support "guarantee buildings". Recently, the people's Bank of China has also expanded the "second arrow" to support private enterprises to issue bonds, providing risk sharing for private enterprises to issue bonds, and private real estate enterprises are also within the scope of support.

It is worth noting that at the national forum on credit work of commercial banks held jointly by the people's Bank of China and the Banco Insurance Regulatory Commission on November 21, Pan Gongsheng, member of the party committee and deputy governor of the people's Bank of China, said that on the basis of the special loans for Baojiao buildings launched earlier, the people's Bank of China will launch a 200 billion yuan loan support plan for six commercial banks to provide commercial banks with zero-cost funds to encourage them to support the work of Baojiao buildings.

According to recent statements by central bank officials, the current fund pool used to support Baojiao buildings includes 200 billion yuan of special loans and 200 billion yuan of loans for Baojiao buildings. It is worth noting that the recent "report on the implementation of China's Monetary Policy in the third quarter of 2022" released by the central bank also mentioned that in the next stage, we should speed up the use of special loans for Baojiaolou and appropriately increase efforts as necessary.

Wu Chaoming, deputy director of the Caixin Research Institute, believes that real estate is an unavoidable hurdle for stabilizing the economy and credit at present. With a series of real estate market support policies coming into effect, coupled with the fact that the previous real estate sales and investment adjustments have been relatively sufficient and the base is low, it is expected that many indicators of the real estate market will gradually bottom and pick up in the future. If the recovery is not as expected, we will not rule out the policy to continue to increase support.

A new round of reserve reduction may be coming.

On increasing financial support to the real economy, the meeting proposed to guide banks to make appropriate concessions to inclusive small and micro-stock loans, continue to do a good job in transportation and logistics financial services, and increase support for bond issuance by private enterprises. timely and appropriate use of reserve reduction and other monetary policy tools to maintain reasonable and abundant liquidity.

Zhao Wei, chief economist of Guojin Securities, pointed out that experience shows that the National standing Committee mentioned that the people's Bank of China would announce a reserve reduction in more than a week after the cut.

In the view of a number of experts, due to the uncertainty of economic recovery, monetary policy needs to continue to provide stronger support to the real economy, while the relief of the current pressure on exchange rate depreciation and the moderate level of domestic inflation have opened up policy space. the release of medium-and long-term liquidity through measures such as reserve requirement cuts, especially targeted reserve rate cuts, can more effectively support the real economy, market entities, and residential sectors.

By giving full play to the important role of the market-oriented adjustment mechanism of deposit interest rate, we can achieve the policy goal of stabilizing the cost of bank liabilities, promoting the reduction of corporate financing and personal consumer credit costs, and stimulating effective social demand. Pang Ming, chief economist and research director of Jones Lang LaSalle Greater China, told the Securities Times that at present, economic recovery and market players still need total tool protection. Corporate financing willingness and personal consumption willingness still need to be stimulated by reducing the cost of bank debt Xiaobai Maimai Inc, and promoting consumption, corporate investment demand, and infrastructure investment all need liquidity support.