While Beijing’s actions have fallen short of market expectations by not including any groundbreaking stimulus measures, the moves are a testament to the political importance placed by Beijing on returning to stable and strong economic growth.

So far, Beijing’s measures have been focusing on areas such as reinvigorating private and small companies, restoring market confidence, creating jobs and stimulating household consumption, Yuan said.

He said that efforts in targeting those areas will continue, and that the economic planner will study and introduce a number of new measures targeting weak links in the economy.

“At present, various departments are stepping up implementation,” Yuan said, adding that lower interest rates, the promotion of automobile purchases, transforming rural parts of the countries into cities, and infrastructure investment are among the key support measures being taken to support the economy.

“Other policies are also being stepped up to provide strong policy support for the continued recovery of the economy,” Yuan said.

Beijing is walking a tightrope as it attempts to address financial risks and set a strong foundation for long-term economic growth. It also needs to counter growing tech restrictions from the US and potential losses from supply-chain-diversification efforts among its trading partners.

So far, policymakers have refrained from launching a massive stimulus plan package as they did after the global financial crisis in 2008. That 4-trillion-yuan plan, a figure that equated to almost 13 per cent of China’s GDP at the time – subsequently brought about manufacturing overcapacity, a property bubble and massive piles of debts. Some infrastructure projects did not deliver the economic benefits the plan had intended.

Yuan also said regulators are studying and mulling over “more targeted and forceful” measures in housing, investment, trade and innovation, and will implement them in the future based on the recovery situation.

Efforts will also be intensified to address overdue payments to companies, especially to medium- and small-sized ones, and to crack down on arbitrary fee collections, to help the private sector, officials from the finance ministry and taxation bureau said.

An adviser to the Chinese government said a key problem for Beijing now is the implementation of these supportive measures by different departments and ensuring that the help can get to those who need it.

“The implementation must be effective, and the business environment must be effectively improved. If the economy fails to pick up in these two months, even if the target for this year can be guaranteed, what is even more worrying is that it will drag down the economic development in the next two years,” said the adviser who spoke on condition of anonymity.

Zou Lan, head of monetary policy at the People’s Bank of China (PBOC), said the central bank will flexibly use policy tools to ensure reasonably ample liquidity in the banking system and also aim to avoid misuse of funds for speculation rather than for supporting the real economy.

“The reserve requirement ratio cuts, open market operations and medium-term lending facilities and other structural monetary policy tools … need to be coordinated and flexibly used,” Zou said at the press conference, playing up the prospects that the regulator still has enough policy room and rich instruments to counter economic risks.

10:57

Boom, bust and borrow: Has China’s housing market tanked?

Boom, bust and borrow: Has China’s housing market tanked?

China’s gross domestic product grew 5.5 per cent in the first half of this year, higher than the full-year target of around 5 per cent.

However, there are widespread concerns that recovery in the world’s second-largest economy has come to a halt because sequential growth fell to 0.8 per cent in the second quarter from 2.2 per cent a quarter earlier. Analysts downgraded their growth forecasts on China after a series of disappointing economic data.

Chinese exports suffered their steepest decline in June since the early months of 2020, tumbling by 12.4 per cent compared with a year earlier. The property sector, a major contributor to China’s GDP, is still in a downturn.

Since July, Beijing has stepped up its efforts to restore confidence. It has ended a regulatory campaign on big tech companies and launched a 31-point action plan that aims to shore up the ailing private sector that underpins economic growth, jobs and technological innovation, and to invigorate the national economy.

The central government also softened its language on the beleaguered property sector in a meeting of the Communist Party’s powerful Politburo last month. A deepening downturn in the property market could also increase the financial burden among local governments, many of which rely on land sales as a major source of revenue and have mountains of outstanding debt.

On Thursday, China’s central bank said it would increase funding support for the private sector after meeting with executives from the property industry. Newly appointed PBOC governor Pan Gongsheng told representatives from the private sector that the financial industry is “duty bound” to support their development.

Meanwhile, the Ministry of Public Security also announced on Thursday that China would allow some foreigners to obtain visas on arrival and rural residents to settle more easily in cities, as part of a series of measures aimed at boosting its flagging economy.

“Monetary policy easing, year to date, has been measured and failed to have a sustained impact on boosting consumption or the property market. To improve consumer confidence, stronger fiscal measures and an easing of the property market curbs will be necessary,” UOB Group said in a research note on Thursday.