Growing Calls for China Stimulus: A Global Demand for Economic Boost
Local residents in Beijing are bracing for economic challenges as more economists are suggesting that China should stimulate growth. Liu Shijin, a former deputy head of the Development Research Center at the State Council, proposed issuing at least 10 trillion yuan in ultra-long government bonds for investment in human capital. This recommendation was made during a presentation at Renmin University’s China Macroeconomy Forum titled “A basket of stimulus and reform, an economic revitalization plan to substantially expand domestic demand.”
Following a disappointing recovery from the Covid-19 pandemic, China’s economy continues to face pressure from a real estate downturn and subdued consumer confidence. Data indicates slower growth in manufacturing sectors, although exports have been a bright spot. Goldman Sachs recently revised downwards its growth forecast for China, highlighting the need for more demand-side easing measures.
The real estate market remains a key concern, with investments down significantly over the past year. To address this issue, policymakers have introduced measures to support the sector, but experts believe more comprehensive actions are needed to stabilize the market and restore buyer confidence.
While China’s top leaders are focused on advancing manufacturing capabilities and technology, economists emphasize the importance of addressing deflationary pressures and implementing fiscal policies to stimulate economic growth. Despite challenges faced by local governments due to tight fiscal conditions, there is a call for greater support from the central government to facilitate economic recovery.
In the midst of economic uncertainties, China remains committed to achieving its growth targets for the year. Efforts are being made to address immediate concerns while also laying the groundwork for long-term economic sustainability through reforms and strategic planning.
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Emily Jensen, graduated from the London School of Economics and Political Science (LSE) in the UK in 2015 with a degree in Economics. She specializes in financial markets and international trade. After graduating, she worked as an analyst at an investment bank in London, where she developed expertise in global economic trends. She later transitioned into consulting, focusing on fintech ventures and providing insights into global economic developments. Emily is passionate about the intersection of finance and technology and aims to drive innovation in the financial sector.