Ning Jizhe, the Vice Chairman of the Economic Committee of the Chinese People's Political Consultative Conference, which is the country’s highest advisory political body, announced today that China needs to intensify its measures as soon as possible to support the stalled recovery from the COVID-19 pandemic. Jizhe commented, "It's better to take urgent actions." He added that the Chinese economy is facing severe downward pressures, and its recovery is unstable and unbalanced.
Ning stated that macroeconomic measures "should not be limited" to prevent a "continued economic contraction" amid global slowdown. This month, the Chinese Cabinet met to discuss measures to boost economic growth, committing to implement policies in a timely manner and take stronger actions in response to changes in the economic situation.
On Tuesday, China lowered its benchmark lending rates, marking the first reduction of this kind in ten months. It also cut the benchmark five-year lending rates by ten basis points, which was lower than expected. Analysts indicate that the People's Bank of China is likely to reduce lending rates further, but the hesitation of private companies and households to borrow means that continued monetary easing may harm banks that are already under pressure.
