ShareBEIJING: China’s central bank has outlined a “moderately loose” monetary plan aimed at boosting domestic demand to spur growth, days after President Xi Jinping 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 may still be needed.
The People’s Bank of China (PBoC) said in a statement it will “implement a moderately loose monetary policy... to create a good monetary and financial environment for promoting sustained economic recovery”. The statement released Saturday 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 emphasized the need to weed out corruption — signaling 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, stabilizing 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 five percent in 2024, a goal Xi has expressed confidence in achieving but which many economists believe will be narrowly missed.
The International Monetary Fund expects China’s economy to have grown by 4.8 percent in 2024 and to grow 4.5 percent in 2025.
China said on Sunday it would launch 15 measures to bolster the development of its western provinces with the construction of logistical infrastructure such as ports and aviation hubs.
The General Administration of Customs said the measures would enhance the integration of rail, air, river and sea links in China’s west, state media reported. The measures are to include enhancing international aviation hubs in cities including Chengdu, Chongqing, Kunming, Xi’an and Urumqi, while developing comprehensive bonded zones, and integrating these with ports and other transport links.
A number of ports would also be built and expanded. China has long sought to bolster the economic heft of its western regions, which have markedly lagged coastal provinces. But ethnic tensions in such places a Xinjiang and hardline security measures Beijing says are needed to safeguard national unity and border stability, have drawn criticism from some Western nations.
China’s western regions comprise around two-thirds of the country’s land area and include regions such as Sichuan, Chongqing, Yunnan, Xinjiang and Tibet. China’s Politburo last year called for a “new urbanization” of western China to revitalize rural areas, expand poverty alleviation efforts and strengthen energy resources. Efforts have also been made to increase linkages to Europe and South Asia through trade corridors including rail freight routes. — Agencies
