China stepped up its economic stimulus with a further 1 trillion yuan ($146 billion) of measures to bolster growth and curb the fallout of repeated Covid lockdowns and the crisis in the property market, Report informs referring to Bloomberg.
The State Council, China’s Cabinet, outlined a 19-point policy package on Wednesday, including another 300 billion yuan that state policy banks can invest in infrastructure projects, on top of 300 billion yuan already announced at the end of June.
Local governments will be allocated 500 billion yuan of special bonds from previously unused quota.
At a meeting chaired by Premier Li Keqiang, the State Council vowed to make use of “tools available in the toolbox” to maintain a reasonable policy scale in a timely and decisive manner, according to a readout from state broadcaster CCTV.
At the same time, the State Council said the economy won’t be flooded with excessive stimulus and China won’t overdraw on its future policy room, reiterating officials’ relatively cautious stance on stimulus this year.
China’s stop-start reopening from Covid lockdowns as well as a yearlong property slump has weakened growth, putting the government’s official goal of “around 5.5%” well out of reach.
Officials have downplayed the target in recent months as they stick to the Covid Zero policy of eliminating infections, with economists polled by Bloomberg projecting growth of less than 4% this year.
Goldman Sachs Group Inc. economists said the measures announced Wednesday won’t be enough to lift the overall growth rate from the 3% they’re projecting.
The latest steps “could help offset the sharp contraction in government revenue and support infrastructure investment growth to some degree,” the economists including Maggie Wei said in a note.
