China’s Former Central Bank Adviser Suggests $1.4 Trillion in Stimulus Measures – Reuters

HONG KONG (Reuters) – According to state media, China may consider issuing ultra-long-term treasury bonds within the next two years to raise at least 10 trillion yuan (approximately $1.4 trillion) in economic stimulus, as suggested by a former central bank adviser on Saturday.

Liu Shijin, who previously held the position of vice president at the Development Research Center of the State Council, emphasized at the China Macroeconomy Forum the need for a comprehensive set of measures. He recommended focusing on enhancing social protections, purchasing unsold apartments to provide affordable housing, and accelerating urban development.

Liu cautioned against mirroring the quantitative easing strategies employed by developed nations, advocating instead for macroeconomic policies that prioritize stability and balance during what he described as a “medium-speed growth stage” for the world’s second-largest economy.

Analysts and policy advisors anticipate that Chinese policymakers will intensify efforts to support the economy in reaching this year’s increasingly ambitious growth goal of around 5%. There is a notable shift towards measures aimed at stimulating demand to combat ongoing deflationary pressures.

Recent economic data from August revealed that the momentum of China’s export-driven recovery remains fragile, while domestic demand continues to face challenges against a backdrop of persistent deflationary risk.