The People’s Bank of China vows to implement «more powerful» policies to offset the effects of an economically crippling coronavirus pandemic.
The remarks were delivered in the latest quarterly monetary policy report which underlined greater focus on economic growth and jobs due to «unprecedented blows» to China’s economy that have set the world on a «recession path».
National GDP shrunk 6.8 percent year-on-year in the first quarter, according to official data.
Compare to its central banking peers, the People’s Bank of China (PBoC) has played a relatively limited role as a provider of stimulus in the midst of record-low growth. Although the pledged that it would play a more active and pro-growth role, it did not provide any details about the actual policies to be implemented.
Targets De-emphasized?
China has long placed heavy emphasis on achieving economic objectives based on quantitative targets but onlookers expect the current environment to alter traditional thought.
«China policymakers are seeking to balance the desire to de-lever the economy, with the need to maintain employment,» according to commentary from Blackrock Investment Institute. «This release from the PBoC suggests that China is pivoting towards a more pro-growth footing in order to offset the ongoing global slowdown as a result of COVID-19.»
In addition to reforms to shift rural working populations to small cities (less than five million) and potentially meaningful increases in fiscal stimulus, Blackrock also expects China’s to persist in its reform policies and its opening, evidenced by the most recent lift of quota limits on foreign investors in China’s domestic market.
