China launches measures for 'failing' economy

As Chinese President Xi Jinping is adamant about not dissolving his Zero Covid policy even at the risk of alienating more people, his party is launching measures to "stabilise" the faltering Chinese economy.

This shows how worried the government is about the failing economy. The measures that have been finalised by the State Council proved the point that the media calls "the economic dislocation from Beijing's Zero-COVID policy, bruised investor and consumer confidence, and geopolitical complications," reported The Singapore post.

The finalised measures are as follows: Extending value-added tax credit refunds to more industries; prolonging the policy of deferred pension premium payments for hard-hit sectors and certain categories of enterprises; doubling the scale of the support facility for loans to micro and small businesses; encouraging the listing of platform companies on domestic and overseas markets; relaxing the restrictions on vehicle purchasing, The Singapore post reported.

The government proposes to urgently launch a new round of rural road construction and renovation work with the aim to give jobs to unemployed people. They further proposed to build a batch of hydropower and coal-fired power plants this year.

But, these measures will be of no use if the big elephant in the room, the Zero Covid policy still exists. Nobody or organisation in China has the power to deal with it, other than President Xi.

The Council meeting follows an urgent meeting of the Politburo of the Chinese Communist Party (CCP) Central Committee presided over by party General Secretary Xi Jinping.

The meeting was forced to admit the growing "complexity, severity, and uncertainty" facing China's economic development "due to Covid" and the Ukraine crisis. Politburo recommended extensive macro and monetary policy to stabilise the economy including relief packages for sectors affected by Covid and tax rebates and tax cuts, according to The Singapore Post.

However, Politburo could not challenge the Zero Covid Policy in the presence of President Xi. It looks like that not only, Politburo but also his party couldn't say anything to the President over the Covid policy.

The CCP leadership desperately tries to strike a balance between defending the Covid Policy and restoring the damaged economy, there appears no likelihood that China will formally abandon its Covid Policy.

Any shift from the Covid measures will be done silently because the CCP cannot revoke its own policy. This is the reason that it has remained silent over the growing anger against the government in recent months. It perhaps thinks not reacting to the anger is the best way to tide over it.

According to the publication, it looks like the CCP and President Xi do not realise the gradual distancing between the people's demands and their goals.