China urged to cut interest rates, boost infrastructure spending to hit 5 per cent GDP growth next year
- Policymakers should use interest rate policy tools earlier rather than later and alleviate the private sector’s debt burdens with lower rates
- The advise came from Zhang Bin and Zhu He, research fellows at influential China Finance 40 Forum think tank
China should lower interest rates and boost infrastructure investment to ensure the economy will grow by at least 5 per cent next year, according to an influential Chinese think tank.
Authorities need to boost domestic demand, including consumption and investment, to counter the property slump and any slowdown in exports, Zhang Bin and Zhu He, research fellows at China Finance 40 Forum, wrote in an article on Monday.
CF40 is a Beijing-based think tank whose members include People’s Bank of China (PBOC) deputy governor Chen Yulu and Sun Guofeng, the head of the bank’s monetary policy department.
Policymakers should use interest rate policy tools earlier rather than later and alleviate the private sector’s debt burdens with lower rates, Zhang and Zhu wrote.
Lower rates can also enhance asset valuations in the private sector and expand investment and consumption levels, according to the article.