China must maintain coronavirus stimulus to ensure full economic recovery, says prominent Beijing adviser

Prominent economist Liu Shangxi says China should not scale back the economic stimulus it rolled out to combat the coronavirus

Beijing must also address ballooning local government debt and should consult incoming Biden administration to reduce tensions, Liu says

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Prominent economist Liu Shangxi says China should not scale back the economic stimulus it rolled out to combat the coronavirus until it has ensured a full recovery. Photo: Weibo

Published: 7:30pm, 20 Nov 2020Updated: 9:34am, 24 Nov 2020

China should maintain its monetary and fiscal stimulus to consolidate its post-coronavirus economic recovery and counter a highly uncertain global environment, a prominent government adviser has said.

“It’s inappropriate to exit macroeconomic policy soon. Otherwise, it could risk falling short of success,” Liu Shangxi, head of the Chinese Academy of Fiscal Sciences, an affiliate of the Ministry of Finance, said in an exclusive interview with the South China Morning Post.

“The stability and continuity of economic policies should be maintained.”

The comments by Liu, who is prominent in Beijing’s economic circles, reflect a cautious outlook for recovery in an ongoing debate over how the country should balance its policy objectives.

From a long-term perspective, we mustn’t have high expectations. There is already a bipartisan consensus [in Washington] to contain China

Liu Shangxi

China’s leaders have decided to reduce reliance on an increasingly turbulent external environment and switch to a dual circulation economic strategy, which will focus on leveraging China’s huge domestic market for growth.

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