China’s central bank has outlined a “moderately loose” monetary plan aimed at boosting domestic demand to spur growth, days after Chinese President Xi Jinping (習近平) called for more proactive macroeconomic policies.
Beijing last year struggled to lift the economy out of a slump fuelled by a property market crisis, weak consumption and soaring government debt.
Officials have unveiled measures aimed at bolstering growth, including cutting interest rates and easing homebuying restrictions, but economists have warned more direct stimulus might still be needed.
Photo: Reuters
The People’s Bank of China (PBOC) said in a statement on Saturday that it would “implement a moderately loose monetary policy ... to create a good monetary and financial environment for promoting sustained economic recovery.”
The statement reiterated plans to cut interest rates and the reserve requirement ratio, which dictates how much banks must hold in their coffers, rather than lending or investing.
It said the changes would be made “at an appropriate time” depending on conditions at home and abroad.
The PBOC emphasised the need to weed out corruption — signalling the continuation of a long-running crackdown in China’s finance industry.
It also said it would continue to help local governments resolve debt burdens with “financial support.” The measures are to “prevent and resolve financial risks in key areas, further deepen financial reform and high-level opening up, focus on expanding domestic demand, stabilising expectations, and stimulating vitality,” the statement said.
The bank’s announcement came after officials convened for a two-day conference in the capital.
Beijing was aiming for growth of around 5 percent for last year, a goal Xi has expressed confidence in achieving, but which many economists believe would be narrowly missed.
The IMF expects China’s economy to have grown by 4.8 percent last year and to grow by 4.5 percent this year.
Separately, the country’s foreign exchange regulator said on Saturday that it would encourage “high-quality foreign capital” to invest in China’s domestic technology sector, a statement posted on the Web site of the State Administration of Foreign Exchange said.
The government would optimize the management of overseas-traded Chinese companies’ funds and continuously improve the supervision policies governing multinational corporations’ capital, the statement added.
Additional reporting by Bloomberg
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