Thread by @ChinaFinance40

In the 2019 #novelcoronavirus outbreak, economic decision-making will be more difficult than that in 2008, which centered solely on ensuring economic growth by all means, according to Huang Yiping: cf40.org.cn/uploads/202003… #economics

China’s current economic policies are based on two major objectives—one is anti-epidemic, and the other is economic restoration, though there would be overlaps between the two goals.

As the spread of the epidemic has been temporarily curbed in China, the government has begun promoting the resumption of production while maintaining the anti-epidemic efforts. At the same time, policy focus should be shifted to economic restoration.

With rising global economic risk, domestic economic policies have become particularly important. Policymakers should also be flexible. Rather than rigidly sticking to the 3% deficit-to-GDP threshold, the focus should be on the health of government's balance sheet.

Fiscal policy should be more active in a way that can stabilize economic growth; but should guard against three tendencies:
1. government should not be parsimonious in spending fiscal resources;

2. the upper-level governments should not simply make policies without providing funds;
3. stimulus policies should be innovative, instead of relying on massive investment into infrastructure sectors such as railway, roads and airports.

Monetary policy should be further relaxed at appropriate timing &extent.The impact of aggressive monetary easing will be quite limited until the epidemic is controlled. Meanwhile, the transmission of monetary policy must be improved to ensure the effectiveness of monetary policy.