China Is Doing All It Can To Juice Its Flagging Economy
China has committed to numerous pledges currently to revive its diminishing economy’s recovery and improve its business environment as thoughts on the outlook of growth continue to ascend – Bloomberg.
A flurry of statements from the Communist Party and the government since July have mainly focused on boosting the share market, uplifting more expenses on consumer goods and cars, and persuading private companies to expand their investments.
Despite two interest cuts this year, Beijing is not releasing the similar kind of fiscal and monetary stimulus that was implemented during the previous downturns.
President Xi Jinping’s government is skeptical to give out the kind of cash handouts to the consumers that pushed post pandemic recoveries in the United States and everywhere else. And the debt laden local Chinese governments do not have the fiscal margin for a severe boost to spending.
China had lowered the stamp duties on stock trades by a full half on 28th August, which is the first cut to the duty since 2008, a move that is intended to support the equity market despite an intense selloff.
In a surprising move on August 15th, the People’s Bank of China had cut its main policy rate of interest by the maximum since 2020, which was the second reduction for this year. The step came right before the release of the July data that portrayed a weak consumer spending growth, a rising unemployment, and sliding investment.
Thirteen departments of the government curated a plan on the 18th of July to boost household expenses, including furniture and electric appliances. Local authorities have been encouraged to help the residents in refurbishing their homes, and individuals must get more convenient access to funds to buy household necessities, as per the measures announced.
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