World Bank’s David Malpass on China’s stimulus resistance ‘out of touch with reality’
- World Bank president David Malpass’ criticism is ‘ungrounded’ and he may not be fully informed about the country’s economic situation, economists say
- China has shown monetary restraint, but analysts point to 1 trillion yuan (US$141.1 billion) policy package and cuts to benchmark loan and mortgage rates
World Bank president David Malpass’ claim that China’s reluctance to deliver more economic stimulus during the current international slowdown has put more pressure on the United States has been rubbished by Chinese economists, who say his criticism is “ungrounded”.
Malpass said earlier this week that the Chinese government has been “less eager” to kick-start growth with financial support like it had done in previous global down cycles.
“That may be good for their economy and good for the long run, but it means for the world you’ve got the No 2 economy that’s not really jumping forward. That puts more burden on the US,” said Malpass, who served as under secretary of the Treasury for International Affairs at the Treasury Department under the Trump administration.
Malpass’ interview with Bloomberg comes amid growing anxiety about the risk of global recession, which the World Bank warned last week could occur next year following interest rate hikes in major economies.
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Despite a faltering economic recovery from the coronavirus pandemic, China has made clear on numerous occasions over the past two years it will not resort to “excessive” stimulus to prop up growth.