HomeChina fails to provide stimulus to the plummeting economyChina fails to provide stimulus to the plummeting economy

China fails to provide stimulus to the plummeting economy

Source : Asian News International (ANI)

China fails to provide stimulus to the plummeting economy
Representative Image

Beijing: In the backdrop of the plummeting property market and continuing COVID lockdowns which have hurt the country’s business sector immensely, China’s intention to not provide help to citizens economically by giving out economic stimuli such as subsidies is unwavering, media reports said.

It seems like China is finally facing up to the limits of economic stimulus as anxious consumers hold back from more spending or borrowing amid continuing COVID lockdowns. There are no signs that Beijing is prepared to rain serious “helicopter money” down on the public, reported Nikkei Asia in an article written by Joe Zhang, a co-chair of SBI China Capital Group in Hong Kong.

He highlighted that just as amid the COVID-19 pandemic, many countries gave subsidies to companies to retain staff and paid cash to citizens to ease the economic pain, China turned away its head in doing the same, reported Nikkei Asia.

It is worth noting that while three weeks ago, the State Council announced a package of 19 measures to support the economy which had a value of the infusion of funds at 1 trillion yuan ($143.7 billion), it is still a far cry from the 4 trillion yuan of stimulus spending Beijing unleashed during the global financial crisis in 2008 when the country’s economy was only about one-third the size it is today.

China’s lockdowns and transport restrictions have hurt small and midsized businesses. Most property developers report seeing little benefit from the policy announcements of recent months while their sales have kept shrinking.

As per observers the true debt level of local government can be opaque and is likely far bigger than official statistics would have believed. State-owned enterprises (SOEs) have been acquiring failing private competitors of late.

Even in the real estate sector, troubled private developers have been selling off assets to state-owned rivals over the past year.

During the World Economic Forum in July Chinese Premier Li Keqiang in a speech to global business leaders said that the government would avoid “flooding the market with stimulus.”

The implication is that the authorities are weary of the same old playbook after four decades. For the government, there is now profound doubt about the desirability of credit as a development strategy and soul searching is underway in the bureaucracy.

Add to that, the bursting of the property bubble and the collapse of hundreds of thousands of businesses in the past year. Then there is a crisis stemming from loans gone bad to countries participating in China’s Belt and Road Initiative, an issue causing international embarrassment in places like Sri Lanka. (ANI)



Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Aatmanirbhar Bharat


Army gets its first indigenous man-portable suicide drones

New Delhi: The army has got its first indigenous man-portable suicide drones that are designed to target enemy training camps, launch pads and infiltrators...

Defence minister Rajnath Singh Sets ₹50k-cr military export target

New Delhi: On resuming charge as defence minister, Rajnath Singh has set a target to generate military exports worth Rs 50,000 crore on an...

AMCA 5th Generation Stealth Fighter Updates

AMCA to be integrated with sophisticated indigenous Distributed Aperture System (DAS) that making it a formidable air asset for the Indian Air Force

Source : IgMp Bureau India’s Advanced Medium Combat Aircraft (AMCA) is on the brink of a revolutionary transformation with the integration of a sophisticated Distributed...

AMCA to incorporate the best features of both 5th and 6th Generation fighters: ADA sources

Source : IgMp Bureau India's strides toward indigenous air dominance receive a substantial boost with the green signal for the Advanced Medium Combat Aircraft (AMCA)...

Most Popular

Recent Comments

Archive Months


IAF to issue RFP for MRFA by mid 2023

Source : Indian Defence Updates (IDU)Representative ImageAccording to latest information, the Indian Air Force will issue the Request For Information (RFI) for the MRFA...

India is central to US’ vision for a free and open Indo-Pacific senior Pentagon official

Source : Press Trust of India (PTI)Representative ImageWashington: The US views its partnership with India as central to its vision for a free and open...

100+ Chinese Military jets Inc. Fighters & Bombers hold drills off Taiwan; US wants Japan by its side to fight China, Russia

Source : The EurAsian TimesTwo Su-35 fighter jets and an H-6K bomber fly in formation near Taiwan (File Photo)China’s Eastern Theater Command used more...

Iran says it has no link to drone strike in Jordan that killed US soldiers

Iran views claims it is involved in an attack that killed three U.S. service members in northeastern Jordan near Syria's border as "baseless", foreign...
error: Content is protected !!