China's GDP grew by 4.8 percent year-on-year in the first quarter of 2022. Despite a pick-up in some major economic indicators in the first two months, some new developments have disturbed the upward momentum. The Ukraine conflict, rise in commodity prices and the recent resurgence of COVID-19 are all challenges for the smooth operation of China's economy.

So market players and individuals are anxious, and market dynamics are showing signs of fatigue. Lockdowns in some places have disrupted the logistics system, affecting production and supply chains, and people's lives. Only by ensuring smooth logistics and stabilizing prices can the momentum be restored for internal circulation and vitality injected into the resumption of work.

Even policy dividends should be projected in a targeted manner to stimulate market vitality. By the end of 2021, China had 154 million market entities, 103 million of them self-employed businesses and 51 million enterprises. More than 90 percent of the enterprises are medium, small and micro-sized ones that play a key role in China's social and economic development. If these small businesses are always struggling to survive, the country's internal circulation will remain feeble. Therefore, the authorities should continue to promote tax and fee cuts to help these businesses tide over market difficulties, and practical measures should be taken to solve their funding problems.

The country should also avoid the negative effects of short-term stimulus. The more it has to deal with unexpected changes, the less it should boost economic growth with strong stimulus measures, such as extremely loose monetary policies, or real estate stimulus. The central bank should use a variety of monetary policy tools to take precise measures, rather than simply and non-discriminatorily release liquidity.

In terms of property market regulation, the key is to ensure "housing is for living in, not for speculation", while adopting measures to ease the difficulty of homebuyers in repaying loans and moderately relaxing the credit line. This will stabilize the fundamentals of China's real economy and avoid disruptive capital flows caused by the monetary policies of the US Federal Reserve, and avoid systemic financial risks caused by liquidity flooding into the stock and property markets.