| 14 April 2024, Sunday |

China economy to rebound in 2023 under precise, forceful monetary policy

According to the central bank’s quarterly report on the implementation of policy, which was released on Friday, the Chinese economy is anticipated to broadly revive in 2023, and monetary policy will be precise and stern.

According to the article, the People’s Bank of China (PBOC) stated that it will avoid “flood-like” stimulus and instead concentrate on stabilizing economic growth and prices while assisting domestic demand expansion.

However, it added that the fundamentals of the domestic economic recovery are “not stable” and that the external situation is still “severe and complex”. The research also stated that while the demand to balance local government budgetary revenue and expenditure continues, the property sector will need time to change.

China will closely watch the trend and changes in inflation and keep the prices of energy and food stable, said the report.

The report has not changed substantially from the previous one, with markets anticipating a government reshuffle, especially of the economic team, and the announcement of economic targets and policies for 2023 during an annual parliamentary meeting kicking off on March 5.

The world’s second-largest economy is stabilizing and improving but still faces many challenges, Premier Li Keqiang said at a cabinet meeting on Wednesday, after the country’s economic growth slowed to one of the worst levels in half a decade due to stringent COVID-19 lockdowns and curbs in 2022.

According to the report, the PBOC would sustain effective credit expansion and sufficiently ample liquidity.

The central bank also promised to begin raising confidence and social expectations while primarily concentrating on stabilizing price, employment, and economic growth.

The ailing real estate market has begun to show some signs of recovery, and the PBOC stated that while it will meet legitimate financing needs in the industry, it will not use real estate as a short-term economic stimulant.

A notification encouraging commercial banks to make loans for rental housing groups to purchase homes was published late on Friday by the PBOC and the banking and insurance regulator.

  • Reuters