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New policies unveiled to push China's economy

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February 24
7:19 AM 2016

China has launched new policy initiatives to propel its economy growth rate. The new policy measures are aimed at meeting the increasing demand in small and medium-sized homes. The government has also commenced new rules accelerating reforms at state-owned enterprises.

The world's second largest economy is gearing up to give a major push to slowing down gross domestic product (GDP). Shanghai has unleashed new policies to meet the growing demand from small and medium-sized homes in the country. Dragon country has also undertaken 10 new rules to speed up reform process at public sector companies. 

DailyFX sees new developments in foreign exchange (forex) policy and changes in financial market regulations. China has taken up a huge task of transforming economy into growth mode. Local governments have introduced new policies for stimulating housing market. Shanghai is China's global financial center and the city has largest population in the country as well. These new rules are aimed at creating more demand in housing sector.

The proportion of small and medium-sized homes with less than 100 square meters (328 feet) will be enhanced to over 70 percent of the city and be over 60 percent in the suburbs. Chinese government has also exempted some tax on purchasing real estate to encourage more number of sales. 

China is also hoping that Group of 20 meeting scheduled for this weekend in Shanghai may result in promoting new models for economy growth. China is also expected to alleviate global anxiety about its currency policy and sluggish markets and economic management. Uncertainty about Chinese economy is majorly impacting the global markets, according to The Wall Street Journal (WSJ).

Proposed 10 new rules for State-Owned Enterprises (SOEs) will be unveiled soon. The new rules will be applicable SOEs of Central and local governments. The Chinese government had taken initiatives for SOEs last time during 1990s, when public sector companies went bankrupt due to solvency. 

Gem News further adds that China's domestic expenditure rose 10.7 percent to Yuan30.1 trillion in 2015. The expenditure added 66.4 percent to country's economy, said Minster of Commerce Gao Hucheng. E-Commerce sales volume on the other hand, rose 31.6 percent to Yuan3.2 trillion in 2015.

According to the site, China has also decided to promote dietary supplement industry, which is lagging behind the US and Japan. Ageing population is increasing, while average living standards in the country are also growing. This is creating more demand for dietary supplements.

As of late, SOEs are facing turbulent conditions in the wake of domestic economy slowdown and sluggish global markets. SOEs will have management system with board committees and professional managers. The Chinese government will encourage companies in steel, coal and aluminum sectors to merge and acquire projects. 

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