China commits necessary spending to meet growth target

Chinese leaders promised to use necessary fiscal spending to achieve this year’s economic growth target of around five per cent. They acknowledged new challenges and hinted at additional stimulus measures.

The government aims to support consumer spending and stabilse the real estate market. These statements were made during a monthly meeting of top Communist Party officials, indicating concerns about slowing growth.

China’s economy is experiencing deflationary pressures from a property market downturn and weak consumer confidence, highlighting its dependence on exports.

Recent economic data missing forecasts has raised concerns about growth targets and a potential long-term slowdown.

“New situations and problems” demand a sense of “responsibility and urgency,” state media reported, citing the Politburo meeting.

China’s central bank announced its most aggressive monetary easing on Tuesday since the pandemic, including interest rate cuts and a 1 trillion-yuan liquidity injection.

Beijing may inject up to 1 trillion yuan into state banks to boost the economy. Chinese real estate shares surged after the announcement, with Hong Kong peers also rising. The yuan and Chinese bond yields increased as well.

Attribution: Reuters

Subediting: M. S. Salama