Global EditionASIA 中文雙語Fran?ais
    Business
    Home / Business / Finance

    Unconventional monetary steps eyed

    By ZHOU LANXU | China Daily | Updated: 2024-12-11 07:33
    Share
    Share - WeChat

    China may take unconventional monetary steps to finance bolder fiscal expansion next year as a top-level meeting has marked a rare shift in policy stance to navigate intensified uncertainties, policy researchers and economists said on Tuesday.

    Those measures, possibly including a sizable central bank purchase of government bonds, coupled with more aggressive cuts in interest rates and reductions in banks' required reserves, would align with policymakers' sharpened determination to bolster policy potency and avoid any sharp economic slowdown, they added.

    Hu Yifan, head of macroeconomics for Asia-Pacific at UBS Global Wealth Management, said that strengthening fiscal stimulus would be key for China to offset tariff threats from the United States in 2025, with trillions of yuan in additional central government debt likely needed in the coming years for housing market destocking and social protection enhancement.

    "We do not rule out the central bank purchasing these bonds on its balance sheet, with the bonds likely designated for specific usages," Hu said, adding that the central bank may also provide low-interest loans to policy-oriented banks to finance related spending.

    Hu's remarks came after the Political Bureau of the Communist Party of China Central Committee held a meeting on Monday to analyze and study economic work in 2025 and the top leadership called for a more proactive fiscal policy and a moderately loose monetary policy, marking a shift from the "prudent" monetary stance for the first time since China dealt with the 2007-09 global financial crisis.

    "The proactive expressions made us believe that China's GDP growth target may remain the same at around 5 percent for 2025," Hu said, highlighting policymakers' determination in terms of stabilizing growth and strengthening the case for stronger macroeconomic policy buffers.

    Chinese equities rose on Tuesday, with the benchmark Shanghai Composite Index up 0.59 percent to close at 3,422.66 points.

    "Monetary easing is expected to be bolder next year compared with 2024," said Feng Jianlin, chief economist at Beijing FOST Economic Consulting.

    Noting that China has reduced the seven-day reverse repo ratea main policy interest rate benchmark — by 30 basis points this year, Feng said that cumulative cuts to the rate could amount to 30 to 40 points in 2025, with market-based lending benchmarks, the loan prime rates, likely to decline by larger margins.

    Lu Ting, chief China economist at Nomura, said his team expects a 50-basis-point reserve requirement ratio cut, which reduces the proportion of deposits banks must keep as reserves to boost market liquidity, before the end of the year and two RRR cuts in 2025.

    According to analysts, Monday's meeting underlined for the first time ever strengthening "unconventional countercyclical adjustments", which economists said refer to measures other than interest rate cuts and RRR reductions that can involve closer monetary and fiscal policy coordination.

    "Unconventional measures, including the central bank providing financing to fiscal expansion, may ultimately be taken, yet the key question is whether the measures would be effective enough," said Shao Yu, a distinguished researcher at the National Institution for Finance & Development.

    According to Shao, compared with the last time China adopted a moderately loose monetary policy, the space for stimulating the property and infrastructure sectors has narrowed. "How to strengthen the effectiveness of policy has therefore become more important."

    Shao, who is also a distinguished professor of Fudan University's School of Management, said it is crucial to avoid the upcoming stimuli from leaving long-term issues like debt and oversupply problems, emphasizing the need to direct more resources to social welfare such as childcare and future-oriented industries such as the low-altitude sector.

    The People's Bank of China and the Ministry of Finance established a joint working group for central bank treasury bond transactions this year, with PBOC Governor Pan Gongsheng vowing to jointly study improving the issuance pace, maturity structure and custody system of treasury bonds.

    Top
    BACK TO THE TOP
    English
    Copyright 1995 - . All rights reserved. The content (including but not limited to text, photo, multimedia information, etc) published in this site belongs to China Daily Information Co (CDIC). Without written authorization from CDIC, such content shall not be republished or used in any form. Note: Browsers with 1024*768 or higher resolution are suggested for this site.
    License for publishing multimedia online 0108263

    Registration Number: 130349
    FOLLOW US
    CLOSE
     
    亚洲欧美日韩中文字幕二区| 最近中文字幕高清免费中文字幕mv| 久久人妻AV中文字幕| 亚洲av无码片在线播放| 精品久久久久中文字幕日本| 日本乱人伦中文字幕网站| 亚洲成av人片不卡无码久久| 韩国中文字幕毛片| 日韩乱码人妻无码中文字幕视频 | 最近中文字幕高清字幕在线视频| 久久久久久国产精品无码超碰| 国产亚洲美日韩AV中文字幕无码成人| 亚洲成?v人片天堂网无码| 本道天堂成在人线av无码免费| 亚洲爆乳无码专区| 人妻无码人妻有码中文字幕| 亚洲欧美日韩在线中文字幕| 无码精品视频一区二区三区| 国色天香中文字幕在线视频| 一二三四在线观看免费中文在线观看 | 久久精品国产亚洲AV无码娇色| 久久无码一区二区三区少妇| 亚洲av无码片在线播放| 亚洲av无码一区二区三区不卡 | 日本精品久久久久中文字幕8| 中文字幕亚洲情99在线| 日韩人妻无码一区二区三区| 最近中文字幕电影大全免费版 | 日韩久久久久久中文人妻| 国产啪亚洲国产精品无码| 中文精品99久久国产 | 亚洲AV日韩AV永久无码下载| 国产aⅴ无码专区亚洲av麻豆 | 国产aⅴ无码专区亚洲av麻豆 | 精品多人p群无码| 人妻丰满熟妇AV无码片| 无码专区永久免费AV网站| 日韩AV片无码一区二区不卡电影| 国内精品久久久人妻中文字幕| 亚洲色成人中文字幕网站| 亚洲中文字幕无码一久久区|