[ad_1]
To cope with weak domestic demand and a real estate crisis, China has stepped up infrastructure investment and poured money into high-tech manufacturing.
China’s economic growth has been unbalanced this year, with industrial output outstripping domestic consumption, a sluggish real estate market that has heightened deflation risks, and rising local government debt.
While strong Chinese exports provided some support, rising trade tensions now pose a threat.
Data released this month showed China’s exports rose 8.6% in June from a year earlier, while imports unexpectedly shrank 2.3%, suggesting manufacturers are bringing forward orders in anticipation of tariffs imposed by trading partners.
Meanwhile, consumer prices rose for a fifth straight month in June but less than expected, while factory deflation persisted and government measures were unable to effectively boost domestic demand.
China’s central bank governor Pan Gongsheng pledged last month to maintain a supportive monetary policy stance and said the central bank would flexibly use policy tools such as interest rates and reserve requirement ratios to support economic development.
Analysts polled by Reuters expect China’s one-year loan market rate to be cut by 10 basis points in the third quarter and banks’ reserve requirement ratio to be lowered by 25 basis points.
Citi analysts expect Beijing to roll out a new round of property support measures after a meeting of the Political Bureau, the ruling Communist Party’s top decision-making body, at the end of July.
In May this year, the Chinese government allowed local state-owned enterprises to purchase unsold completed housing, and the central bank also set up a 300 billion yuan affordable housing re-lending mechanism.
[ad_2]
Source link
