China Plans Policies to Rescue Growth, Support Tech Firms

(Bloomberg) -- China may soon reveal more policies intended to rescue the economy after top leaders vowed to meet growth targets without compromising on the country's stringent Covid Zero strategy.

Actions to promote investment, shore up exports and support technology platform companies are all on the table, state media outlets reported Thursday. The People's Bank of China also said late Wednesday it would conduct “normalized financial supervision” over online platforms, echoing language used last week by the Communist Party's Politburo, the top decision-making body.

The State Administration of Foreign Exchange on Thursday vowed to deepen reform, too, by promoting cross-border financing and investment -- both to encourage the flow of more foreign capital into China, and to spur domestic firms to go global. The foreign exchange regulator also pledged in its statement to prevent and resolve any external shocks and risks to safeguard a stable foreign exchange market.

The media reports and government agency statements come days after the Politburo issued its sweeping pledge to support the economy, which is in the throes of the country's worst coronavirus outbreak since 2020. Authorities deployed strict lockdowns in places like Shanghai and Jilin province to contain infections, measures that have pummeled factory activity and consumer spending, imperiling the government's growth target of about 5.5% for the year.

The state media reports don't contain much detail about specific actions, which are likely to come from various government departments and agencies over coming weeks. However, some of the highlights from the reports include support for technology platform businesses, possible easing of real estate curbs and a boost in fiscal spending.

Beijing can't rule out the possibility of increasing this year's fiscal deficit to boost infrastructure spending, according to one report in the China Securities Journal citing Wang Qing, an analyst at Golden Credit Rating
The government could use special government bonds and policy bank bonds to promote infrastructure projects, or ease more curbs on the property sector to spur demand, the newspaper -- which is owned by China's official Xinhua News Agency -- cited analysts as saying
In a separate front-page report, the China Securities Journal said the economy may have bottomed out in April and should start to recover this month
Authorities are expected to roll out measures to support the technological innovation of internet platform companies, according to a report in the official Economic Daily newspaper
Tech platform businesses are key in stabilizing growth and ensuring employment, the newspaper said, reiterating comments made by the Politburo last week that urged for regulation supporting the “healthy” development of the sector. The report also parallels the PBOC's Wednesday remarks