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#COVID19 has dealt three waves of blows to the #Chineseeconomy:
1. domestic economic standstill;
2. the cost of reviving the economy from deep freeze;
3. global economic shutdowns.
For May and June, the 2nd and 3rd wave linger, and #China may see higher-than-expected pressure.
1. domestic economic standstill;
2. the cost of reviving the economy from deep freeze;
3. global economic shutdowns.
For May and June, the 2nd and 3rd wave linger, and #China may see higher-than-expected pressure.
What should policymakers do? Liu Yuanchun from Renmin University suggests the following: lnkd.in/g6kyxVE
1. Prepare for the worst with flexible, expandable, diversified policy responses.
2. Combine short-term stimulus with medium-term adjustment and expansion.
1. Prepare for the worst with flexible, expandable, diversified policy responses.
2. Combine short-term stimulus with medium-term adjustment and expansion.
3. Fiscal deficit should be allowed to exceed 3.5%.
4. Moderately loosen monetary policies.Cut the reserve ratio and interest rates. With RRR of nearly 10%, we can consider converting the RMB 10 trillion+ in bank reserve into treasury/special bonds to make room for policy easing.
4. Moderately loosen monetary policies.Cut the reserve ratio and interest rates. With RRR of nearly 10%, we can consider converting the RMB 10 trillion+ in bank reserve into treasury/special bonds to make room for policy easing.
