China signals more stimulus as economic slowdown deepens
BEIJING – Reuters
China will aim to achieve “a good start” in the first quarter for the economy, the state planner said on Jan. 15, signaling authorities could roll out more stimulus measures in the near term to counter slowing growth.
China will strengthen monitoring of its economic situation and improve its “reserve” of economic policies, the National Development and Reform Commission (NDRC) said in a statement.
The world’s second-biggest economy slowed in 2018 as Chinese authorities carried out painful long-term structural adjustments to transition to a more gradual but sustainable growth trajectory.
A trade war with the United States has also heaped uncertainty on China’s near-term outlook.
Exports unexpectedly fell the most in two years in December in a sign of mounting pressure on the economy.
Sources told Reuters last week that Beijing was planning to lower its growth target to 6-6.5 percent this year after an expected 6.6 percent in 2018, the slowest pace in 28 years.
The proposed target, to be unveiled at the annual parliamentary session in March, was endorsed by top leaders at the annual closed-door Central Economic Work Conference in mid-December, the sources told Reuters.
Annual growth of about 6.2 percent is needed this year and in 2020 to meet the ruling Communist Party’s longstanding goal of doubling gross domestic product and incomes in the decade to 2020, and to turn China into a “modestly prosperous” nation.
This year, China will step up fiscal expenditure and implement larger tax and fee cuts.
The cuts will focus on reducing burdens for small firms and manufacturers, the finance ministry said in a statement on Jan. 15.
Stabilizing employment is the government’s top priority, NDRC Vice Chairman Lian Weiliang said at a press conference on Jan. 15.
The central bank, in a separate statement, said it will maintain prudent monetary policy, keeping it neither too tight nor too loose, and strengthen the counter-cyclical adjustments.
Monetary policy will be made more forward-looking, flexible and targeted, the People’s Bank of China (PBOC) said.
Chinese banks extended 16.17 trillion yuan ($2.40 trillion) in net new yuan loans last year, the PBOC said in its statement, blowing past the previous record of 13.53 trillion yuan in 2017.
Outstanding yuan loans were up 13.5 percent at the end of 2018 from a year earlier, according to the central bank.