Even though Chinese president Xi Jinping has pledged to meet economic targets, economists are sceptical that the Chinese economy can grow 5.5 per cent this year.
, despite the country’s ailing property market, and its “zero-Covid” policies that have resulted in widespread lockdowns.
President Xi Jinping has vowed China will reach its lofty economic targets, dispute major disruptions.Unfortunately, Xi provided few details of how China intended to go about boosting growth. In his virtual keynote speech to the BRICS business forum on Thursday, he said China would “strengthen macro-policy adjustment and adopt more effective measures to strive to meet the social and economic development targets for 2022”, according to a Xinhua report.
Certainly, the Chinese central bank, The People’s Bank of China , appears wary of being overly generous with monetary stimulus, and has confined some minor rate cuts and reduced the number of deposits banks have to set aside.The PBoC is clearly worried that more aggressive stimulus at a time when the US central bank is tightening monetary policy could trigger massive capital outflows.
This could involve local governments being allowed to use a sizeable chunk of next year’s planned borrowing quota. Alternatively, Beijing could turn a blind eye to increased off-balance sheet borrowing by local government financing vehicles, but this would undermine its efforts over the past five years to rein in such practices and impose greater financial discipline.