Views:5 Author:Site Editor Publish Time: 2019-05-31 Origin:Site
Nation's supportive monetary policies, fiscal stimulus will pay off, say experts
The Chinese economy can "surf through" the tide of Sino-US trade tensions, as both broad-based and targeted measures to stabilize growth will pay off, said senior economists at Netherlands-based global financial institution ING Bank NV.
"Holistically, China can weather and surf through the trade tensions because it has the fiscal stimulus and supportive monetary policies already in place," said Iris Pang, director and economist of ING in China.
With the planned proactive fiscal measures being pushed at a good speed, the Chinese economy is set to grow steadily at about 6.3 percent this year, Pang told China Daily.
The Chinese authorities are implementing this year's plan to cut nearly 2 trillion yuan ($289.8 billion) worth of taxes and fees, as well as to fund 2.15 trillion yuan worth of infrastructure investment through local government special bonds.
The 4 trillion-yuan stimulus package - equivalent to approximately 1.7 percent of China's nominal GDP - is of a large scale, and will help offset the drag of trade tensions on growth, Pang said.
"I don't think China needs any more broad-based stimulus," Pang said, adding that it is important not to overdo the stimulus and instead "save the bullets" for potential worse-case scenarios.
During the first quarter, the world's second-largest economy grew by 6.4 percent year-on-year, unchanged from the previous quarter, according to the National Bureau of Statistics. In April, the economy remained stable but cooled modestly, with growth in industrial output and retail sales down from March.
"The Chinese economy is performing adequately in difficult circumstances (caused by the trade tensions)," said Robert Carnell, chief economist and head of research of Asia-Pacific at ING.
Though the economy as a whole will be on an even keel, some private and small exporters have been hurt by the US tariffs and may shut shop, which will weigh on employment stability and consumption, Carnell said.
Making sure the private sector withstands the trade tensions is essential, only by which the economy can keep driving itself forward, said Carnell.