China Ramps Up Rhetoric, Plans New Steps To Juice Up Economy
China is stepping up support for the economy by ramping up spending and considering new measures to boost bank lending.
The nation’s chief planning agency is making more money available to local governments to fund new infrastructure projects, according to people familiar with the matter. Meantime, China’s cabinet has discussed lowering the minimum ratio of provisions that banks must set aside for bad loans, a move that would free up additional cash for lending. Premier Li Keqiang said policy makers “still have a lot of tools in the box” to combat the slowdown in the world’s No. 2 economy, days after People’s Bank of China Governor Zhou Xiaochuan broke a long silence to talk up confidence in the nation’s currency, the yuan. Policymakers are battling to prevent any further slowdown, which could escalate into a hard landing,” said Rajiv Biswas, Asia-Pacific chief economist at IHS Global Insight in Singapore. “These additional measures will act to boost liquidity in the banking sector and increase local government spending on infrastructure development.”