Editorial | China leaves no doubt on way forward at key economic talks
Wide-ranging measures aim to inject momentum into growth of the domestic economy and reflect tone of earlier Politburo meeting
China’s leaders have set out to deliver a jolt to the stalled recovery of the world’s second-biggest economy. They are ready to deploy a range of measures that would loosen the government’s purse strings in an attempt to ensure critical growth targets are met in the year ahead.
They include providing ample liquidity by raising the deficit ratio, issuing special bonds, cutting the amount of cash banks must hold in reserve instead of lending and cutting interest rates.
The focus of these measures, revealed after a meeting of the central economic work conference, is to boost stubbornly weak domestic demand and reduce reliance on exports, improve the business environment and restore confidence in the private sector and among foreign investors.
Weak consumption – driven by falling household wealth caused by a prolonged property market slump and declining stock indices – continues to drag on China’s growth.
These negatives have been balanced by strong international demand for exports. But a series of economic indicators in November, including factory-gate prices falling for a 26th consecutive month and consumer inflation hitting a five-month low, strengthened the case for the authorities to take action to stimulate domestic economic confidence.
