American media quoted people familiar with the matter and said that due to concerns about the deterioration of the economic situation, the Chinese government has reflected in the past few weeks and promised to take more measures to stimulate economic growth.
According to the Wall Street Journal on Monday (June 19), a few months ago, China showed signs of strong rebound after ending strict epidemic prevention and control.But in April and May, the disturbing data came one after another.
According to people familiar with the matter, the group who was sent to investigate the financial status of the local government brought such information to the central government after returning to Beijing, that is, it is difficult for local government officials to repay local debt.Meetings of government leaders with the region show that even after the end of last year, the epidemic restrictions were unliked at the end of last year, confidence was still weak.
Official data shows that the economy has lost momentum and the situation is increasingly dim.The weak Chinese real estate market showed signs of re -pressure, and the unemployment rate of young people reached a record high.It is reported that many Chinese people have said in private that they no longer think that the Chinese government is still paying attention to promoting economic growth.
People familiar with the matter said that these concerns have prompted the Chinese government to reflect on the past few weeks.Suddenly high -level officials promised to take more measures to stimulate economic growth, although this may encourage speculative behaviors in the economy.
The Bank of China lowered three policy interest rates last week to stimulate borrowing.In addition, the Wall Street Journal reported last week that the central government is considering the issuance of special Treasury bonds worth about RMB 1 trillion (about S $ 187.2 billion) to raise funds for new infrastructure projects.This is a strategy of stimulating growth in the past that has been proven to be effective, but economists say that this strategy may increase while increasing debt.
Relevant departments are still considering relaxing relevant regulations and encouraging people to buy more than a house. Although Chinese officials have repeatedly warned that "houses are used for living, not used for frying."
Economists say that as more and more Chinese people seem to lose confidence in the economy, the Chinese government has no choice but to take action.
Lu Ting, chief Chinese economist in Nomura, wrote in a report this week that the real obstacle of economic growth recovers is that the people lack confidence.He also said that the situation in China is increasingly like Japan in the 1990s: After the Japanese real estate bubble ruptured, people's confidence weakened, which has led to decades of economic growth and price decline in Japan for decades.
Nomura will reduce its expected domestic GDP's growth in 2023 from 5.5%predicted to 5.1%, and GDP growth is expected to be reduced from 4.2%to 3.9%in 2024.
Morgan Stanley's economists believe that stimulating measures will help China's economic growth accelerate again in the third quarter and restore the endogenous consumption recovery it calls.They also said that China ’s continuously improving dominant position in renewable energy supply chain will help further promote growth.
