www射-国产免费一级-欧美福利-亚洲成人福利-成人一区在线观看-亚州成人

Global EditionASIA 中文雙語Fran?ais
Opinion
Home / Opinion / China and the World Roundtable

China: Waiting for policy tailwind

By Xiong Yi | China Daily | Updated: 2023-12-18 07:26
Share
Share - WeChat
A pedestrian walks past the headquarters of PBOC in Beijing. [JIANG QIMING/CHINA NEWS SERVICE]

A year after the restrictions imposed because of the COVID-19 pandemic were lifted, China's economic recovery still lacks enough momentum. One thing is clear: China's economy as of today is operating at below potential. We believe a sizable negative output gap emerged in 2022 that has persisted in 2023, judging from the low capacity utilization rates, labor market slack, weak credit demand and, most importantly, negative consumer and producer prices inflation. Therefore, China's potential for growth should be higher than the 4.1 percent average growth in 2022-23. In our view, it should be in the 4.5-5 percent range. Growth could be even higher for a short period, if the economy can enter a cyclical rebound to close the negative output gap.

That cyclical rebound hasn't happened yet, primarily because after a prolonged property sector downturn and a sharp drop in inflation, a vicious loop has emerged among consumer spending, business profits and forward expectations for income and prices. A positive shock is required to break the loop. Unfortunately, both external demand and public spending have contracted for most of 2023, thus reinforcing rather than breaking this vicious circle.

Only the government can jump-start the economy through forceful and coordinated policy responses. The most important policy variable is the government's 2024 growth target. Our base case is the government will likely commit to boost growth by setting a growth target at "above 4.5 percent" for 2024, moderately higher than the 4.1 percent average growth in 2022-23. This will be consistent with our 4.7 percent real GDP growth and 1 percent inflation forecasts in 2024.

While the People's Bank of China will continue to ease lending conditions, to bring about recovery in the property market, more decisive fiscal policy support is necessary to see China's growth stabilizing at 4.7 percent in 2024, as per our forecast.

Fiscal expansion is the most effective policy tool to stimulate demand and boost prices in today's low-growth, low-inflation environment. The government finally changed its fiscal stance in Q3 by accelerating spending, helping local governments with their debt problems and, more recently, announcing stimulus packages for infrastructure investment and housing construction. It has also broken the long-standing 3 percent of GDP "glass ceiling" on budgetary deficits. We expect the fiscal stance will be 1.5-2 percent of GDP more expansionary in 2024, assuming the government will set a 3.8 percent of GDP fiscal deficit target, fully implement the 1 trillion yuan ($140.69 billion) infrastructure stimulus, and tap the PBOC's pledged supplementary lending facility for public housing projects.

Additional monetary easing is also warranted in 2024. We expect the PBOC to cut the medium-term lending facility rate by another 45 basis points before mid-2024 to bring bank interest rates below the natural rate. It will likely also cut the reserve requirement ratio by another 50 basis points, and inject liquidity through pledged supplementary lending and other long-term lending facilities, to make sure there's sufficient liquidity in the financial system to accommodate the upcoming fiscal expansion.

US/China growth dynamics and interest rate differentials will likely turn more favorable for the renminbi. The US economy is expected to enter a mild recession in the first half of 2024. The Fed is expected to cut interest rates by a total of 150 bps before year-end, 100 bps more than the expected cut by the PBOC. The renminbi will be supported by a sustained current account surplus and a reduction of capital outflows. We therefore expect the yuan will appreciate modestly by the end of 2024.

The author is China chief economist at Deutsche Bank. The views don't necessarily represent those of China Daily.

If you have a specific expertise, or would like to share your thought about our stories, then send us your writings at opinion@chinadaily.com.cn, and comment@chinadaily.com.cn.

 

Most Viewed in 24 Hours
Top
BACK TO THE TOP
English
Copyright 1995 - . All rights reserved. The content (including but not limited to text, photo, multimedia information, etc) published in this site belongs to China Daily Information Co (CDIC). Without written authorization from CDIC, such content shall not be republished or used in any form. Note: Browsers with 1024*768 or higher resolution are suggested for this site.
License for publishing multimedia online 0108263

Registration Number: 130349
FOLLOW US
主站蜘蛛池模板: 国产99视频精品免视看7 | 久久经典免费视频 | 欧美一级特黄做 | 久草国产在线观看 | 精品日韩一区二区三区视频 | 国产激情视频在线播放 | 精品欧美亚洲韩国日本久久 | 一级视频网站 | 91精品一区二区三区在线 | 国产图片亚洲精品一区 | 日韩成人毛片高清视频免费看 | 久草新免费 | 自拍理论片 | 欧美日韩在线视频免费完整 | 久久久久亚洲国产 | 扒开双腿猛进入喷水免费视频 | 欧美日韩在线播放一区二区三区 | 久久99精品久久久久久久不卡 | 久久99国产精品久久欧美 | 亚洲国产成人久久综合野外 | 美女黄色在线看 | 欧美一级人与动毛片免费播放 | 激情视频一区 | 精品91一区二区三区 | 欧美做爰免费大片在线观看 | 99视频只有精品 | 国产精品专区第二 | 成年人在线观看免费 | 91porny九色国产首页在线 | 一区二区三区网站在线免费线观看 | 国产免费专区 | 国产亚洲欧美ai在线看片 | 色综合加勒比 | 亚洲一级毛片欧美一级说乱 | 美女视频永久黄网站免费观看韩国 | 免费成人| 国产国产人免费人成成免视频 | 久久国产午夜精品理论片34页 | 高清欧美一级在线观看 | 色精品一区二区三区 | 国产午夜三级 |