China has recently announced that it will be implementing “more proactive” fiscal stimulus measures and a “moderately” looser monetary policy in order to combat the economic challenges posed by the ongoing trade war with the United States and slowing global growth.
The decision was made during a meeting of the State Council, China’s cabinet, where top officials discussed the need for more aggressive measures to boost the country’s economy. The move comes at a time when China is facing increasing pressure from the trade war with the United States, which has been weighing on its economic growth.
The fiscal stimulus measures are expected to include tax cuts, increased government spending on infrastructure projects, and other measures to stimulate economic activity. The government has also indicated that it will take steps to support small and medium-sized enterprises, which have been particularly hard hit by the trade war.
In addition to the fiscal stimulus measures, China also plans to adopt a “moderately” looser monetary policy, which could involve lowering interest rates or reducing reserve requirements for banks. The aim of this policy is to encourage lending and boost liquidity in the financial system, which could help to stimulate economic growth.
The announcement of these measures comes as China’s economy has been showing signs of slowing down in recent months. The country’s GDP growth rate in the third quarter of 2019 was the lowest in nearly three decades, and there are concerns that the trade war with the United States could further impact economic growth in the coming months.
By implementing these fiscal stimulus measures and looser monetary policy, China is hoping to boost domestic demand, support economic growth, and mitigate the impact of the trade war. The government has emphasized that these measures will be implemented in a “proactive” and “moderately” loose manner, indicating that it will take a cautious approach to ensure that the measures are effective in stimulating economic activity.
Overall, China’s decision to implement more aggressive fiscal stimulus measures and a looser monetary policy reflects the government’s commitment to supporting economic growth and addressing the challenges posed by the trade war. It remains to be seen how effective these measures will be in boosting the economy, but they represent a significant step towards addressing the current economic challenges facing China.