China said it plans to increase the amount of money circulating in its economy next year in a new effort to spur consumer spending and shield the country from a global downturn.
Saturday’s announcement by the State Council, or Cabinet, comes on the heels of a multibillion-dollar economic stimulus package announced last month that calls for injecting more government money into the economy through spending on construction and other projects.
There are mounting signs that China’s economic slowdown is sharper and deeper than expected. Exports fell last month for the first time in seven years and Chinese Industry Minister Li Yizhong (李毅中) warned on Friday that worse was to come.
PHOTO: AFP
China will increase its money supply by 17 percent next year, the Cabinet said in a statement on its Web site. It said that would be 3 percentage points to 4 percentage points above the total growth of economic output and consumer prices.
Increasing the supply of money is aimed at stimulating domestic economic activity and spending by making more credit available to encourage consumers and companies to borrow.
“We must strengthen the role of the financial sector in supporting economic growth by better implementing an active fiscal policy and moderately easing monetary policy,” the Cabinet statement said.
The growth rate of China’s money supply slipped this year as business activity and bank lending slowed.
The growth in China’s broadest measure of money supply shrank from 16 percent in August to 15 percent last month, the central bank said. That measure, known as M2, includes cash and bank deposits.
The Cabinet also decided to increase by 100 billion yuan (US$14.6 billion) the amount of loans for the country’s policy banks this year and suspend and reduce the sale of some central bank securities, the statement said.
The central bank has been draining billions of dollars from the economy every month to reduce pressure for prices to rise as revenues from China’s booming export industries flood through the economy.
The government said it would stop sales of three-year central bank notes and reduce sales of one-year and three-month bank notes, but gave no other details.
With economic growth forecast at 9 percent and inflation at about 6 percent this year, China’s money supply growth has just kept pace with growth in commercial activity. With both growth and inflation forecast to be lower next year, the planned expansion in money supply should be much larger than is needed to maintain commercial activity.
Li said on Friday that the government will spend 15 billion yuan (US$2.2 billion) to subsidize loans to companies to improve technology and cut energy use. Li said Beijing might buy surplus steel to help producers as demand plummets, as well as cut taxes to spur auto and real estate sales.
MORE VISITORS: The Tourism Administration said that it is seeing positive prospects in its efforts to expand the tourism market in North America and Europe Taiwan has been ranked as the cheapest place in the world to travel to this year, based on a list recommended by NerdWallet. The San Francisco-based personal finance company said that Taiwan topped the list of 16 nations it chose for budget travelers because US tourists do not need visas and travelers can easily have a good meal for less than US$10. A bus ride in Taipei costs just under US$0.50, while subway rides start at US$0.60, the firm said, adding that public transportation in Taiwan is easy to navigate. The firm also called Taiwan a “food lover’s paradise,” citing inexpensive breakfast stalls
TRADE: A mandatory declaration of origin for manufactured goods bound for the US is to take effect on May 7 to block China from exploiting Taiwan’s trade channels All products manufactured in Taiwan and exported to the US must include a signed declaration of origin starting on May 7, the Bureau of Foreign Trade announced yesterday. US President Donald Trump on April 2 imposed a 32 percent tariff on imports from Taiwan, but one week later announced a 90-day pause on its implementation. However, a universal 10 percent tariff was immediately applied to most imports from around the world. On April 12, the Trump administration further exempted computers, smartphones and semiconductors from the new tariffs. In response, President William Lai’s (賴清德) administration has introduced a series of countermeasures to support affected
CROSS-STRAIT: The vast majority of Taiwanese support maintaining the ‘status quo,’ while concern is rising about Beijing’s influence operations More than eight out of 10 Taiwanese reject Beijing’s “one country, two systems” framework for cross-strait relations, according to a survey released by the Mainland Affairs Council (MAC) on Thursday. The MAC’s latest quarterly survey found that 84.4 percent of respondents opposed Beijing’s “one country, two systems” formula for handling cross-strait relations — a figure consistent with past polling. Over the past three years, opposition to the framework has remained high, ranging from a low of 83.6 percent in April 2023 to a peak of 89.6 percent in April last year. In the most recent poll, 82.5 percent also rejected China’s
PLUGGING HOLES: The amendments would bring the legislation in line with systems found in other countries such as Japan and the US, Legislator Chen Kuan-ting said Democratic Progressive Party (DPP) Legislator Chen Kuan-ting (陳冠廷) has proposed amending national security legislation amid a spate of espionage cases. Potential gaps in security vetting procedures for personnel with access to sensitive information prompted him to propose the amendments, which would introduce changes to Article 14 of the Classified National Security Information Protection Act (國家機密保護法), Chen said yesterday. The proposal, which aims to enhance interagency vetting procedures and reduce the risk of classified information leaks, would establish a comprehensive security clearance system in Taiwan, he said. The amendment would require character and loyalty checks for civil servants and intelligence personnel prior to
RSS