Opinion | China’s short-term moves to bolster growth today crucial for tomorrow

China is in the midst of a painful attempt to shift its economy away from reliance on traditional manufacturing and property sectors towards technology and services of the future.

Earlier this month, the Central Committee of the Chinese Communist Party set out crucial mid- and long-term goals to try to ensure the overhaul’s success and help the country escape the middle-income trap.

Still, all the well-meaning objectives in the world will be in vain if the economy is going off the rails today.

This would explain the urgency and focus of this week’s Politburo meeting, which wrapped up on Tuesday vowing to step up macro policies and stabilise market confidence to ensure the country achieves its full-year growth target of about 5 per cent for 2024.

The Politburo suggested more drastic policy support would be coming over the second half aimed at lifting the private sector and restoring investor confidence.

Details are to follow from the State Council, or cabinet, and central and local government departments. Economic data shows momentum is faltering, slipping from 5.3 per cent in the first quarter to 4.7 per cent in the second.

The 24-member Politburo, headed by President Xi Jinping, is therefore focused on the here and now. Among the weaknesses it noted was uneven growth. Guangdong province posted growth 1.1 percentage points below the national average.

Shenzhen, the tech hub authorities are banking on, helped prop things up with 5.9 per cent growth. The Politburo also signaled support for the private sector.

It vowed to defend economic entities and improve property protection, lift market restrictions and stop local governments using administrative measures to interfere in economic disputes.

To tackle weak domestic consumption, authorities also sought to bolster consumer confidence, offering more diverse services that target the young or provide greater support for the graying economy.

This may make life better for couples caring for both young children and elderly parents. To revitalize the struggling property sector, local authorities are being encouraged to buy back incomplete or nearly complete projects and transform them into public housing.

Some form of easing is expected to ensure adequate financial resources are injected into the system. Officials said they would accelerate the issuance and use of special bonds.

In perhaps a sign of things to come, Guangdong and Shenzhen this week tapped the Hong Kong market with “dim sum” bond sales.

These short-term measures are meant to dovetail with the mid- and long-term goals. Ensuring growth does not falter now will provide a stable platform from which to accomplish the important restructuring work to overhaul the economy that lies ahead.