Security and stability of key sectors in focus

Supplies, big projects, demand push, industrial recast top NDRC's priorities

China will focus on the security and stability of energy, grain, industrial and supply chains next year as policymakers seek economic stability in response to downward pressure on growth, the country's top economic regulator said.

The National Development and Reform Commission will make more efforts to facilitate building up energy production, supply, storage and marketing systems, and clear bottlenecks in industrial and supply chains, the regulator said in a statement on its official WeChat account on Monday.

The commission said it will make a big push to implement the tasks mapped out by the annual Central Economic Work Conference held last week.

The focus will be on ensuring supplies of coal, electricity and natural gas, speeding up construction of large-scale wind power and photovoltaic bases in deserts, and building independent and controllable industrial and supply chains in 2022.

More efforts will also be made to fully unleash the domestic demand potential, promote consumption upgrade, speed up the construction of 102 key projects mapped out in the 14th Five-Year Plan (2021-25), accelerate the push for industrial restructuring, and improve the support mechanism for grain production, purchasing, storage, processing and marketing.

Experts warned of rising uncertainties and risks both domestically and externally, saying more steps to shore up the current growth momentum are expected to also deal with the COVID-19 pandemic impact and downward pressure.

On Tuesday, the NDRC and the Ministry of Industry and Information Technology jointly released a notice to perk up the industrial economy and foster high-quality development.

The country will work on ensuring security and supplies of energy, boost coal output and crack down on illegal activities like spreading false information and price gouging in the market, the notice stated.

Noting that enterprises are feeling the pressure of rising costs of raw materials, the new document stated the country will closely monitor factors like demand, supply and price changes in the bulk raw materials market, strongly increase supplies, strengthen regulation of commodity futures and the spot market, and crack down on "excessive speculation".

On key industrial and supply chains, the notice said strengthening monitoring of the operation of key industries, establishing and improving an early warning mechanism, and boosting innovation and application of core technologies are now priority tasks.

The new document also called for more efforts to speed up the implementation of key projects and develop a number of "new infrastructure" projects in fields like 5G.

Luo Zhiheng, deputy research director and chief macroeconomic analyst at Yuekai Securities, said he expects China's economic policy to turn more supportive of growth in 2022, with a focus on expanding domestic demand, driving economic transformation, promoting common prosperity, boosting technological innovation and fending off risks.

Given the government's effective measures to stabilize the economy and expand domestic demand, Luo said he expects consumption and investment in manufacturing and new infrastructure to be key growth drivers next year.

Looking ahead, Luo said the government needs to take more steps to expand effective investment, including speeding up the implementation of central budget investment plans, increasing support for investment in strategic emerging industries, lessening pressure on rising commodity prices and increasing financial support for real economy, especially the small and medium-sized enterprises.

Louis Kuijs, head of Asia Economics at Oxford Economics, said the think tank expects the government to ease its macroeconomic stance in 2022, mainly by speeding up the issuance and use of local government bonds and accelerating project approvals.

"We expect overall real investment to edge up in 2022 due to the rise in infrastructure investment and resilient manufacturing investment," Kuijs said in a report on the Chinese economy in 2022.

"We expect China to maintain gradual progress with reforms to raise productivity and rebalance the economy.

"In addition, we expect China to open up more … We expect more steps to lower import tariffs, ease capital flows and shorten the 'negative list' on foreign investment."