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Home / Business / China's Vice President Liu calls for more efforts to support the economy of Reuters

China's Vice President Liu calls for more efforts to support the economy of Reuters



© Reuters. US and Chinese officials hold trade talks at the US Trade Representative Office in Washington

By Zheng Li and David Stanway

SHANGHAI (Reuters) – Chinese regulators should increase support for the economy and maintain good liquidity in the financial system, Vice Premier Liu Han said Thursday, and suggests that Beijing will soon reveal more policies to boost growth among the growing US trade pressures.

Beijing has many political tools and can handle various challenges, said Liu at an economic forum in Shanghai.

Despite a number of support measures and political relief since last year, China's economy continues to clash to recover, and last month's sudden rise in US-Sino tension has raised the fear of a full-fledged trade war that could trigger a global recession.

Liu commented came after a day after data showed that China's credit growth was weaker than expected in May, and strengthened market expectations that more monetary relief is needed. The factory activities were entered into in May, and imports fell most in almost three years, and marked the demand.

"At the moment we have some external pressure, but the external press will help us increase our confidence in innovation and accelerate the pace of high-speed development," said Liu, who is also the leading dealer in US-China trade negotiations.

will roll out more vigorous steps to promote reform and open up, lau.

People's Bank of China chief Yi Gang last week said there was "huge" room to make political adjustments if the war worsens. [1

9659004] "We have plenty of room in interest, we have plenty of space in the requirements for reserve conditions, and also for fiscal policy, I believe that room for adaptation is enormous," says Yi.

Earlier on Thursday, China Daily, referring to economists, said China is expected to adjust money and credit delivery in the coming weeks, including downturns to interest rates or reserve requirements, to counteract downside risks if trading tensions escalate.

Further cuts were already expected in the bank's reserve requirement rate (RRR) this year, especially after the trade conflict escalated last month. Both sides hiked tariffs on each other's goods, and Washington threatens more.

Last month, the PBOC increased efforts to increase loan growth and business activity, announcing a three-phase shoot in regional banks' reserve requirements to reduce the financing costs of small and private companies.

It has now cut six RRR times since early 2018. However, in contrast to previous downturns, the central bank has been reluctant to cut interest rates so far. Analysts believe it is being abolished by aggressive measures because of concerns that such a move could risk adding a mountain of debt relief from previous stimulus screams.

More powerful relief can also trigger capital outflows and put pressure on what has gone almost 3 percent against the dollar since merchants up in last month.

Sources told Reuters in February that the PBOC considered a reference rate cut a last resort. But some analysts now believe that one or more cuts are likely if the trade dispute comes out of control and the US federal reserve starts to cut its prices, giving the PBOC more room to maneuver.

Guessed experts, China Daily said that financial institutions faced tighter liquidity in June, and the aforementioned authorities will stimulate faster credit growth to meet economic growth targets.

Beijing has set a growth target of around 6 to 6.5 percent this year, down from 6.6 percent in 2018, which was the slowest expansion rate the country has seen for nearly 30 years.

Analysts at Bank of America Merrill Lynch (NYSE 🙂 believe that China's GDP growth may fall to 5.8 percent this year and 5.6 percent by 2020 if the trade crisis intensifies.


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