Chinese Finance Minister Lan Fo’an. File
| Photo Credit: AP
“The Chinese government is looking at additional ways to boost the economy,” Finance Minister Lan Fo’an said on Saturday (October 12, 2024,) but he stopped short of unveiling a major new stimulus plan that analysts and stock investors were hoping for.
Mr. Lan’s remarks left the door open for such a plan in the future but he did not divulge what is under consideration. “There are other policy tools that are being discussed that are still in the pipeline,” he said at a news conference, adding that there is “ample room” in the government budget to raise debt and increase the deficit.
China’s economy has remained sluggish despite the lifting of COVID-19 restrictions at the end of 2022. Companies have cut back on hiring and wages and a prolonged downturn in the property market has deflated consumer confidence, curbing spending.
The government has raised pensions and offered subsidies to people who trade in old cars or appliances for new ones, but such steps have failed to jolt economic growth.
Chinese stock markets rallied after the central bank and other government agencies announced steps at the end of September to revive the property sector and prop up financial markets.
But the rally has since cooled amid concern about whether the moves were enough to generate a sustainable economic recovery. Investors were hoping Mr. Lan would announce a stimulus package of up to 2 trillion yuan ($280 million).
The Finance Minister instead said the government would roll out a package of incremental measures to speed up implementation of its existing policies.
They include increasing scholarships for students, issuing bonds to help major banks replenish their capital and providing more support to highly indebted local governments, some of which have had to curtail public services.
Published – October 12, 2024 11:36 am IST