Security is the precondition for development, and development is the guarantee of security.

　　General Secretary Xi Jinping pointed out: "Advancing Chinese modernization is a brand-new undertaking, and on the road ahead we will inevitably encounter various contradictions, risks and challenges." "To effectively respond to these risks and challenges and win strategic initiative in increasingly fierce international competition, we need to further comprehensively deepen reform, use well-developed institutions to prevent and defuse risks and effectively respond to challenges, foster new opportunities amid crises, and open new prospects amid changes."

　　The Third Plenary Session of the 20th CPC Central Committee proposed: "We must properly coordinate development and security, and implement various measures to prevent and defuse risks in key areas such as real estate, local government debt, and small and medium-sized financial institutions."

　　Since the beginning of this year, under the strong leadership of the Party Central Committee with Comrade Xi Jinping at its core, all regions and departments have carried out systematic planning and made sustained efforts to coordinate the defusing of risks in real estate, local debt, small and medium-sized financial institutions and other areas, holding the bottom line of preventing systemic risks; summer grain production again achieved a bumper harvest, energy and resource supplies remained stable, the capacity to safeguard important industrial and supply chains continued to improve, and the foundation for safe development was consolidated and strengthened, providing solid support for China's economy to withstand pressure, operate smoothly, and make progress while maintaining stability.

　　Properly and orderly handling risks and hidden dangers, with policy effects continuing to be released

　　In January this year, General Secretary Xi Jinping delivered an important speech at the opening ceremony of the seminar for principal leading cadres at the provincial and ministerial level on promoting high-quality financial development, stressing that "we must always regard risk prevention and control as the eternal theme of financial work" and that "we must focus on preventing and defusing financial risks, especially systemic risks."

　　To continuously and effectively prevent and defuse risks in key areas, properly and orderly defuse and handle existing risks, and strictly control incremental risks, relevant departments have taken multiple measures, and policy effects have continued to be released.

　　"The delivery date is much earlier than expected, and we can move into our new home sooner." Successfully taking delivery of her home with delivery standards exceeding expectations made Ms. Zhang, an owner at the Beitou Heyuan project in Xingning District, Nanning City, Guangxi, feel that "a stone has been lifted from her heart."

　　Previously, the Beitou Heyuan project experienced cash flow problems and construction progress was slow. In January this year, with the coordination and promotion of the local housing and urban-rural development department and the Guangxi Financial Regulatory Bureau, China Minsheng Bank's Nanning Branch extended 330 million yuan in real estate development loans to the project under the national urban real estate financing coordination mechanism—the first such loan in the country. By the end of June this year, 42 of the project's total 49 residential buildings had completed final acceptance or pre-acceptance, and 887 commercial housing units had been delivered to owners.

　　Implementing the urban real estate financing coordination mechanism is one of the key measures for preventing and defusing risks in the real estate sector. Data show that as of now, 297 cities at the prefecture level and above have established urban real estate financing coordination mechanisms, and commercial banks have approved 1.3 trillion yuan in loans for "whitelist" projects.

　　Establishing a 300 billion yuan relending facility for affordable housing, lowering the minimum down payment ratio for individual housing loans nationwide, canceling the national lower limit on individual housing loan interest rates... Comprehensive measures at both the supply and demand ends are being taken to fight the battle to ensure housing delivery for commercial housing projects and support rigid and improved housing demand. In the first half of this year, the year-on-year declines in the floor area and value of new commercial housing sales nationwide narrowed compared with January to May. In recent months, the area of online-signed second-hand housing transactions has increased year on year, and transaction area in first-tier cities grew relatively quickly month on month in June.

　　Since the beginning of this year, policies have been directed toward the same goals and governance has been advanced in a coordinated manner, and positive progress has been made in preventing and defusing risks in key areas. Positive changes have appeared in the real estate market, the pace of reform and risk resolution of small and medium-sized financial institutions has accelerated, and work on preventing and defusing local debt risks has been coordinated.

　　In March, the State Council held a video conference on preventing and defusing local debt risks, requiring all regions and departments to "properly defuse existing debt risks and strictly prevent new debt risks." Financial institutions, following the principles of marketization and rule of law, reasonably used means such as debt restructuring and replacement, adopted classified measures to defuse existing debt risks of financing platforms, and strictly controlled incremental debt.

　　Under the policy orientation of "one province, one policy," the reform of provincial rural credit cooperatives is accelerating, rural credit reform plans in multiple provinces have been finalized, and institutional reform, mechanism transformation, management strengthening, and momentum enhancement are being advanced in an integrated manner. Adapting to changes in the supply and demand pattern of the rural financial market, many places have successively established prefecture-level unified legal-person rural commercial banks, and the merger and reorganization of village and township banks continues to advance. At present, the operating and regulatory indicators of various financial institutions in China remain within reasonable ranges, and the quality and efficiency of serving the real economy have significantly improved.

　　Dong Ximiao, chief researcher of Zhaolian, believes that in the long run, the fundamental trend of China's economic recovery and long-term improvement has not changed, there is a solid foundation for maintaining the stability of the financial system, and positive progress in preventing and defusing risks in key areas has consolidated the foundation for the economy to remain generally stable and make progress while maintaining stability.

　　Addressing both symptoms and root causes, combining immediate and long-term considerations, and improving long-term mechanisms for risk prevention and control

　　General Secretary Xi Jinping pointed out: "We must adhere to addressing both symptoms and root causes and combining immediate and long-term considerations, and firmly hold the bottom line of preventing systemic risks." "We must improve risk prevention and control mechanisms and establish and improve risk assessment mechanisms, decision-making risk evaluation mechanisms, risk prevention and control coordination mechanisms, and risk prevention and control responsibility mechanisms."

　　Since the beginning of this year, policies that focus on the present while taking a long-term view have been introduced one after another, striving to improve long-term mechanisms for risk prevention and control and safeguard the overall stability of the economy and finance.

　　Relying on the construction unit's own funds and a 405 million yuan loan from Bank of Communications for "dual-use for normal and emergency purposes" public infrastructure construction, the construction of the Foshan International Land Port Bonded Logistics Center and the International Express Supervision Center in Guangdong is being accelerated. After completion, the project will normally be used as a logistics facility, effectively promoting integrated logistics operations in the Guangdong-Hong Kong-Macao Greater Bay Area; when converted for emergency use, it can ensure transportation efficiency and cold-chain storage requirements.

　　The "three major projects" of affordable housing construction, urban village transformation, and "dual-use for normal and emergency purposes" public infrastructure construction are important levers for building a new model of real estate development. Data show that in the first half of this year, the "three major projects" drove real estate development investment up by 0.9 percentage points.

　　"Accelerating the construction of a new model of real estate development is the fundamental solution to cracking the difficult problems of real estate development and promoting the steady and healthy development of the real estate market," said Li Yujia, chief researcher of the Guangdong Provincial Housing Policy Research Center. As basic institutions in financing, fiscal and taxation, land, and sales continue to improve, the "market + affordable" housing supply system will better adapt to the development trend of new urbanization and changes in the supply-demand relationship of the real estate market, promoting the long-term healthy operation and stable development of the real estate market.

　　The Third Plenary Session of the 20th CPC Central Committee proposed: "We will improve the government debt management system, establish a full-caliber local debt monitoring and supervision system and a long-term mechanism for preventing and defusing hidden debt risks, and accelerate the reform and transformation of local financing platforms."

　　Reduce the number of financing platforms according to plan and establish a long-term mechanism for financing platform management; orderly defuse the stock of hidden debt and resolutely curb the increment of hidden debt; strengthen the management and use of local government bonds and improve the full-life-cycle management mechanism of special bonds covering "borrowing, use, management, and repayment" to improve the efficiency of fund use... Since the beginning of this year, localities have strengthened their sense of responsibility and systematic thinking, earnestly implemented the package of debt resolution plans, and steadily advanced debt risk resolution.

　　"At present, local government debt resolution has achieved obvious results, the debt structure between the central and local governments is continuously being optimized, and the stock of government hidden debt is gradually shrinking," said Zhang Yiqun, vice chairman of the Performance Management Committee of the Chinese Public Finance Society. The government's ability to issue, manage, control, and resolve debt has continued to strengthen, effectively easing the debt burden of local governments and providing positive assistance for stimulating local economic vitality and achieving high-quality development.

　　The Political Bureau of the CPC Central Committee held a meeting to review the Provisions on Accountability for Preventing and Defusing Financial Risks (Trial), further tightening the responsibilities of relevant financial management departments, financial institutions, industry competent departments, and local Party committees and governments; the draft Financial Stability Law was submitted to the 10th session of the Standing Committee of the 14th National People's Congress for a second review, improving provisions on financial risk prevention and handling... A series of policy measures are aimed at strengthening the financial stability guarantee system, improving the financial regulatory system, and enhancing the capacity for financial risk prevention and control.

　　Dong Ximiao believes that consolidating the institutional foundation for preventing and defusing financial risks, continuously improving the systems for financial risk prevention, early warning, handling, and accountability, and filling shortcomings in the systems for preventing and defusing financial risks will further enhance the effectiveness of financial risk prevention and control.

　　Adhering to the positive interaction between high-quality development and high-level security

　　General Secretary Xi Jinping stressed: "We must adhere to coordinating development and security, uphold both development and security, and achieve a positive interaction between high-quality development and high-level security."

　　Preventing and defusing risks is for advancing high-quality development, and achieving high-quality development is conducive to preventing and defusing risks at the root. Since the beginning of this year, in the face of severe and complex domestic and international situations, macro policies have focused on building a solid security foundation for high-quality development.

　　Securing the food "rice bowl"——

　　"Our farm's plots used to have poor conditions, with high-standard farmland accounting for only 8.1%, and it also lacked infrastructure such as gravel roads, cement drying yards, and farm tool yards. This year, with the support of additional government bond funds issued in 2023, the farm built 65,000 mu of high-standard farmland, which is expected to increase grain production capacity by 900 tons per year," said Liu Bo, chairman of Beidahuang Agricultural Reclamation Group Daxing Farm Co., Ltd.

　　The central government, through means such as additional government bond funds, transfer payments, and raising subsidy standards, has advanced projects such as high-standard farmland construction, fully implemented full-cost insurance and planting income insurance for the three major grain crops, promptly allocated agricultural disaster prevention and mitigation and water conservancy disaster relief funds, and pre-allocated central natural disaster relief funds to support localities in flood control, drought relief, and geological disaster relief work; the National Financial Regulatory Administration guided banking financial institutions to support the national food security strategy and increase credit support for tackling key core technologies in the seed industry and for high-standard farmland construction... Pro-farmer policies have continued to intensify, consolidating the foundation of food security.

　　This year's national summer grain sown area remained stable, with total output of 149.78 million tons, an increase of 3.627 million tons over the previous year. Another bumper summer grain harvest has laid a solid foundation for stabilizing grain production for the whole year and consolidating and strengthening the momentum of economic recovery and improvement.

　　Consolidating energy security——

　　In the Sichuan Basin, Sinopec's Chuanxi Gas Field has achieved breakthroughs in precise target trajectory control technology for well depths exceeding 8,000 meters, building an annual natural gas production capacity of 2 billion cubic meters; in the desert and Gobi, the main construction of the "two towers and one machine" solar thermal energy storage power station in Guazhou County, Gansu Province, has entered the commissioning stage, and after being put into operation, its annual power generation will reach 1.8 billion kilowatt-hours... From establishing a coal production capacity reserve system and strengthening the construction of coal transportation corridors and product reserve capacity, to adhering to the simultaneous development of centralized and distributed, and equal emphasis on onshore and offshore, and accelerating the construction of large wind power and photovoltaic base projects, policies have been vigorously implemented to ensure that in the first half of this year raw coal production remained basically stable, oil and gas production grew steadily, and power production was effectively guaranteed, with clean power such as hydropower, nuclear power, wind power, and solar power in industrial enterprises above designated size accounting for 2.3 percentage points more than the same period last year.

　　Hu Hanzhou, director of the Energy Statistics Department of the National Bureau of Statistics, introduced that in the first half of the year, high-quality development and high-level security of the energy industry were advanced in a coordinated manner, domestic energy production was generally stable, energy imports remained stable, and the foundation for energy supply security was further consolidated.

Enhancing the security of industrial and supply chains——

　　In July, the first domestically produced FB2 intermediate-pressure rotor of the world's largest class was successfully shipped, marking that China has successfully mastered the entire-process key core technology for FB2 intermediate-pressure rotor forgings for million-kilowatt-class ultra-supercritical units, providing hard-core support for safeguarding the security of the industrial and supply chains of the national energy equipment sector.

　　The Ministry of Industry and Information Technology and two other departments jointly issued the Guidelines for Improving the Supply Chain Management Level of Manufacturing Enterprises (Trial), deploying efforts to strengthen multi-dimensional supply chain coordination among enterprises; the People's Bank of China and other departments required continuous improvement of the supply chain finance policy framework and infrastructure to enhance the availability of supply chain financing for small and micro enterprises; the National Financial Regulatory Administration guided banking financial institutions to focus on scientific and technological innovation, specialized, refined, distinctive and innovative development, and green and low-carbon development, as well as small and micro enterprises upstream and downstream of key industrial and supply chains and in fields such as foreign trade, and to improve specialized service mechanisms... As the manufacturing industry continues to strengthen, extend, and supplement its chains, innovation entities have continued to grow. By the end of June, China had cultivated more than 140,000 specialized, refined, distinctive and innovative small and medium-sized enterprises, including 12,000 specialized, refined, distinctive and innovative "little giant" enterprises; 200 national-level specialized and distinctive small and medium-sized enterprise industrial clusters and 688 provincial-level specialized and distinctive small and medium-sized enterprise clusters had been built.

　　"In the first half of the year, risks in key areas were defused in an orderly manner, security in food, energy and resources, and important industrial and supply chains continued to improve, and the foundation of economic security was consolidated, escorting high-quality development," said Xu Guangjian, a professor at the School of Public Administration and Policy of Renmin University of China. China's national economy has operated generally smoothly, the trend of industrial transformation toward "new" and "green" has become more obvious, and high-quality development has been steadily advanced, providing strong support for better defusing and withstanding various risks and challenges.