China promises support for economy amid stock plunge due to crackdown on monopolies and data-security issues
by Associated Press
The announcement gave no sign the debt, anti-monopoly and other regulatory campaigns are finished.
On Mar. 16, China’s government tried to reassure jittery investors by promising support for real estate and technology companies after regulatory crackdowns caused stock prices to plunge.
Regulators should issue market-friendly policies to “invigorate the economy,” officials said at a Cabinet meeting led by Vice Premier Liu He, President Xi Jinping’s top economic adviser, the official Xinhua News Agency said.
The announcement appeared aimed at rebuilding business and investor confidence as the ruling Communist Party tries to revive economic growth that slid to 4% i n the final quarter of 2021, compared with the full year’s expansion of 8.1%.
The downturn was triggered by a collapse in construction and housing sales after Beijing launched a crackdown on debt in real estate that officials worry is dangerously high.
That added to private sector anxiety about the status of Chinese industries following anti-monopoly and data-security investigations, multimillion-dollar fines and public criticism of e-commerce and other internet companies and a spat with Washington about oversight of companies with U.S.-traded shares.
Xi’s government has promised to support entrepreneurs who generate new jobs and wealth. But crackdowns have shaken the private sector since 2020, with no indication when the uncertainty might end.
The announcement gave no sign the debt, anti-monopoly and other regulatory campaigns are finished. But some economists suggested enforcement may have peaked after leaders announced a “policy pivot” in December to focus on the shorter-term goal of shoring up economic growth.
Share prices of companies including e-commerce giant Alibaba Group have fallen by almost half on foreign exchanges, wiping out more than $1 trillion in stock value since the start of last year.
Abroad, Russia’s attack on Ukraine has pushed up oil and other commodity prices and raised the risk of more snags for trade at a time when economies are recovering from the pandemic.
Housing sales and construction, industries that support millions of jobs, plunged last year. The government has tried to revive demand by telling banks to lend more to home buyers, but economists say Beijing is moving cautiously to avoid igniting a surge in housing costs and debt.