China won’t use ‘bazooka-like stimulus’ to fire up economy despite rate cut, but long-term problems lurk
- The world’s second-largest economy is facing a series of headwinds, including its property market, mountains of debt, slowing exports and the risk of deflation
- China’s central bank on Tuesday lowered a short-term lending rate for the first time in 10 months in a bid to restore market confidence and prop up the economy
Hopes of more measures to shore up China’s economy in the short term are building after this week’s policy rate cut, although there are rising questions over how far Beijing will go to respond to long-term problems that could hold back growth for years to come.
But on Tuesday, China’s central bank lowered the seven-day reverse repo rate for the first time in 10 months earlier this week, while its top economic planner released 22 measures to lower costs for firms, including exempting and reducing value-added tax and lowering loan interest rates.
Beijing’s efforts to support the economy were also seen in recent field trips, as dozens of inspection teams were sent out to urge local officials to focus on post-coronavirus recovery work.
We must tackle problems [raised by businesses] as quickly as we can
“We must tackle problems [raised by businesses] as quickly as we can,” Luo Huining, leader of one of the inspection teams, told officials in the central Jiangxi province, according to state media.