BEIJING: China is in “no rush” to add a monetary stimulus to cope with downward pressure on the world’s number-two economy, the head of the country’s central bank said on Tuesday.
A lingering trade war with the United States and cooling growth has raised expectations that Beijing may resort to a round of stimulus measures to provide a kickstart.
Major central banks, including the Federal Reserve and the European Central Bank, have also cut borrowing rates or signalled the willingness to do so in recent months.
But People’s Bank of China boss Yi Gang told a news conference: “We are not in a rush to act as central banks of some other countries have done.”
He said there was no pressing need for big policy easing steps or to further cut the amount of cash lenders must keep in reserve to release more money into the stuttering economy.
“Monetary policy must remain prudent,” he said, adding that there was ample room for both fiscal and monetary policy manoeuvering.
Earlier this month, the PBoC slashed reserve requirement ratios for banks, freeing up about $126 billion to boost lending to mostly small and medium enterprises.
China’s economy showed signs of strain as industrial output in August grew at the slowest pace in 17 years and as investment and retail sales flagged.
“There is indeed downward pressure on the whole world economy,” Yi said.
“But our overall judgement is that China’s current economic operations are still in a reasonable range,” he said.
The economy expanded 6.2pc in April-June, the worst reading since the early 1990s but in line with forecasts and within the government’s target range.
Beijing was taking steps to boost domestic consumption and investment, and contain financial risks to battle economic headwinds, National Bureau of Statistics head Ning Jizhe said at the same news conference.
China’s economy has also been hit by a bruising trade spat with the United States, with the two sides swapping tariffs on a total of $360 billion worth of goods.
Washington and Beijing have recently extended olive branches ahead of trade talks next month with the US delaying a new round of tariffs by two weeks and China exempting some products from punitive duties.
Published in Dawn, September 25th, 2019