Chinese Premier rejects economic stimulus option as latest data shows more weakness
- Li Keqiang says ‘massive stimulus’ like 2008 not on Beijing’s radar, even as new data shows further downside
- New bank lending falls sharply in October, suggesting businesses reluctant to invest given uncertainties created by the trade war
The Chinese government has no plans to resort to a “massive stimulus” similar to that of 2008 as a way to manage its slowing economy amid the trade war with the United States, Premier Li Keqiang said on Tuesday.
Instead, Beijing will focus its policies on “energising the market, in particular market entities” and creating “fair and equal regulations” to maintain momentum in the world’s second biggest economy, Li said in a speech before attending the annual summit of the Association for Southeast Asian Nations in Singapore.
“Despite the downward pressure, we will not resort to massive stimulus,” Li said.
His comments came as the People’s Bank of China released data showing that bank lending slowed sharply in October to a level well below expectations, suggesting businesses are reluctant to proceed with investments given the economic uncertainty created by the trade war with the United States.
Chinese banks extended 697 billion yuan in net new yuan loans in October, just about half of the 1.38 trillion yuan in the month before and below the median forecast for lending of 862 billion yuan in a Reuters survey of economists, according to central bank figures released on Tuesday. Nationwide fiscal revenues in October fell 3.1 per cent from the same month last year, limiting the government’s scope for increased spending.