China has limited room for further easing of monetary policy and should undertake structural reforms, such as encouraging entrepreneurs, instead of relying on macroeconomic policies to revive growtha central bank advisor said on Sunday, according to a Reuters report.
Liu Shijin, a member of the monetary policy committee at the People’s Bank of China (PBOC), told a financial forum in Shanghai that Beijing’s room for monetary policy easing was limited by widening interest rate differentials with USA.
From a fiscal point of view, Chinese governments are under stress at different levels, he declared at the annual Bund Summit conference.
“If China continues to focus on macroeconomic policies in its efforts to stabilize growth, “There will be more and more side effects.”said Liu, vice president of the Development Research Center of the State Council.
“And more importantly, we will again miss the opportunity to carry out structural reforms,” he added.
China’s recovery after the crisis COVID has lost momentum amid weak consumption, falling exports and a worsening housing debt crisis, and the economy is struggling despite a series of monetary and fiscal measures to boost confidence.
Foster entrepreneurship
Liu on Sunday proposed a new round of structural reforms that could help the economy immediately while injecting momentum into long-term growth.
These include demand-side reforms, focused on giving migrant workers access to public services enjoyed by city dwellers, as well as supply-side reforms, involving fostering entrepreneurship in emerging industries, he said.
The highest economic planning body of China announced this month that it would create a new department to help private companies, as Beijing tries to revive investor confidence damaged by a government crackdown on sectors from the Internet to tutoring.
Liu said on Sunday that China should more clearly recognize the status of private companies.both from an ideological and political point of view.
With information from Reuters.
Source: Larepublica
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