Chinese economy under pressure but no aggressive action needed, PM says


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BEIJING: China’s economy faces further downward pressure, but authorities should avoid deploying economic measures in a “campaign and aggressive” manner, state media said on Monday quoting Premier Li Keqiang .

The world’s second-largest economy had experienced an impressive rebound from last year’s pandemic crisis, but has since lost momentum as it grapples with a manufacturing slowdown, debt problems in the housing market and COVID-19 outbreaks.

China should step up efforts to stabilize six key areas, including employment, finance, trade and investment, and ensure people’s livelihoods and the development of market entities as well as food and energy security. Mr. Li said.

But the government should avoid taking “a campaign-like, aggressive and universal approach” when deploying economic measures, Li said in a meeting with provincial officials.

The government is considering policies on tax and fee cuts, as well as some reform measures, to support businesses, Li said.

The People’s Bank of China said on Friday it would keep its cautious monetary policy “flexible and focused”.

Noumra said some changes in the wording of the central bank’s third-quarter monetary policy implementation report suggested it could become more decisive in monetary easing.

“We expect the possibility of a drop in the RRR to increase rapidly over the next two months, but we still view the likelihood of a cut in policy rates to be quite low,” Nomura said in a note.

The Chinese cabinet said on Monday it would increase financial support for small businesses affected by soaring commodity prices, power shortages and recent COVID-19 outbreaks.

(Report by Kevin Yao and the Beijing Newsroom, edited by Louise Heavens)

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