[October 21, 2024] The Chinese government’s efforts to "rescue the economy" have proven ineffective, with recent economic data falling short of expectations. Facing limited time for the rest of the year, China’s State Council has launched an all-out effort, sending vice premiers and state councilors to various regions to "investigate" and urge the implementation of incremental policies to revive the economy. However, analysts argue that China's economic problems require political reform, something the Chinese Communist Party (CCP) is unlikely to undertake.

The Beijing Youth Daily's new media outlet Zhengzhijian reported on October 19 about the recent work activities of the vice premiers and state councilors of the State Council.

From October 14 to 17, Executive Vice Premier Ding Xuexiang visited Henan and Jiangsu to investigate economic operations; from October 10 to 12, Vice Premier He Lifeng visited Taiyuan, Shanxi, and Xi’an, Shaanxi to investigate the real estate sector; from October 14 to 16, Vice Premier Zhang Guoqing visited Hunan to investigate manufacturing; and from October 14 to 17, Vice Premier Liu Guozhong visited Chongqing and Hubei to investigate agriculture-related matters.

In addition, from October 15 to 16, State Councilor Wang Xiaohong visited Tianjin to investigate "support for high-quality economic development"; from October 14 to 16, State Councilor and Secretary-General of the State Council Wu Zhenglong visited Shandong and Jilin to review policy implementation; and on October 18, it was reported that State Councilor Shen Yiqin recently visited Hainan to investigate work related to culture, tourism, and civil affairs.

The official reports claimed that these top officials were "supervising and guiding" efforts to "increase the intensity" of implementing a package of incremental policies.

The same report mentioned that all seven senior State Council officials emphasized the need to "promote continued economic recovery and strive to achieve the annual economic and social development goals," with the government aiming for an economic growth target of around 5% this year.

On October 18, official data showed that China's economy grew by 4.6% year-over-year in the third quarter of 2024, marking the slowest growth rate since early 2023 and the third consecutive quarterly decline. The CCP is notorious for manipulating statistics, and the authenticity of its economic data has long been questioned by outside observers.

The real estate sector is in particularly dire straits. Official data showed that in September, the average home prices in 70 large and medium-sized cities in China experienced an expanding year-over-year decline. From January to September, sales of new commercial properties dropped by 22.7%, with residential sales falling by 24.0%.

Despite multiple rounds of policy support over the past year, there are no signs of recovery in the real estate market. Data released on October 18 revealed that new home prices in China fell at the fastest pace since May 2015.

Professor Xie Tian of the Aiken School of Business at the University of South Carolina told Epoch Times, "It is said that China’s homeownership rate has already reached 90%, so most people who can buy homes have already done so. Even with policies like reduced mortgage rates and down payments, there’s little attraction for these people."

Additionally, according to recent data from China's National Bureau of Statistics, the Producer Price Index (PPI) in September fell by 2.8% year-over-year, marking a six-month low, while the Consumer Price Index (CPI) growth slowed by 0.2 percentage points compared to August.

Since the end of the "zero-COVID" policy, China’s economy has remained weak. By the end of September, the government introduced policies including interest rate cuts, reserve requirement ratio reductions, lower mortgage rates, and 800 billion yuan (RMB) in policy tools, temporarily boosting the stock market. However, after the "National Day" holiday, the market crashed again. Despite numerous press conferences from government departments reaffirming policies, the public remains skeptical, and market volatility persists.

On October 17, five ministries, including the Ministry of Housing and Urban-Rural Development and the Ministry of Finance, held a joint press conference announcing measures to "stop the decline and stabilize" the real estate market. These included plans to implement 1 million new units of urban village and dilapidated housing renovation, as well as increasing the "whitelist" project loan scale to 4 trillion yuan. However, the stock market plunged that day, with real estate stocks particularly affected, and the Hong Kong stock market also reacted poorly.

On October 21, the Shanghai Composite Index fluctuated downwards, approaching the 3,200-point low.

George Magnus, a scholar at the University of Oxford, described the recent round of large-scale economic stimulus by the CCP as a "bazooka-style" approach, which may only provide short-term effects but is ineffective in the long run.

Magnus recently wrote in The Guardian, "China’s problems require structural or fundamental economic reforms, which necessitate political reform. But that is a pipe dream for its Leninist government."

Editor: Lin Congwen