Leading economics figures in China have signalled the maintenance of robust monetary and fiscal stimulus policies in the wake of the COVID-19 pandemic.
Liu Shangxi, head of the Chinese Academy of Fiscal Sciences (CAFS), said to South China Morning Post that current monetary and fiscal policies should be maintained in order to ensure that China recovers fully from the economic impacts of the coronavirus.
“It’s inappropriate to exit macroeconomic policy soon,” said Liu. “Otherwise, it could risk falling short of success.”
“The stability and continuity of economic policies should be maintained…as to whether [PBOC] should exit its monetary stimulus I think it’s not the right time, not even for a marginal tightening.”
Lou Jiwei (楼继伟), chair of the National Council for Social Security Fund and formerly the Chinese finance minister, said at the 11th Caixin Summit on 13 November that China’s fiscal and monetary policy would “continue to expand” given the “massive uncertainties” faced by the global economy.
According to Lou these uncertainties include the ongoing spread of the Novel Coronavirus, anti-globalist sentiment, the spread of populist political movements and mismatches between debt and economic cycles.
The Chinese government has spent around 9 trillion yuan (approx. USD$1.3 trillion) in 2020 on efforts to contain the coronavirus and keep the economy afloat, while the finance ministry foresees a record high deficit this year equal to 3.6% of national GDP.