China's central bank recently said that it will not use aggressive economic stimulus to support the sluggish economy, but will maintain liquidity at a reasonable level and provide additional aid packages. Companies struggle to access financial packages.
Policy will also be made more about looking for flexible and effective measures, said the People & # 39; s Bank of China (PBOC) in a statement at a press conference in Beijing.
PBOC made the announcement in the context of a series of blurry reports from the world's second-largest economy in recent months, with the renminbi depreciating strongly against the dollar and the central stock market. Korea plummeted.
As the Chinese economy shrinks and the impact of US trade tariffs on the economy is shifting, policy makers are changing their priorities to reduce the risk of growth.
In particular, PBOC said it would pay special attention to smaller companies that struggle to borrow and are still struggling with loans and higher operating costs. These are also the companies most affected by formal hedging with risky credit practices such as banks in the shadow.
Analysts expect the PBOC to reduce additional taxes and charges. The PBOC also stipulated that the revenue from mandatory reserve reductions should be available for loans to smaller companies.
Beijing also stimulates infrastructure spending to stimulate the economy.
However, new stimulus measures and relaxation of credit policy have raised concerns that Beijing is reducing its debt relief efforts.
Deputy Prime Minister Liu He said Monday that China should strengthen capital markets and expand financial channels for small and medium-sized enterprises.
However, the effect of such movements is still very blurred. Policymakers have been trying for at least eight years to improve the finances of smaller companies, but most analysts say the problem only gets worse when companies are owned by the state. more preferential credits continue to be received.
Economic growth in China slowed to 6.7% in the second quarter compared to the same period last year, still higher than the government target for the year as a whole (around 6.5%) but some indicators Main activity is weakening rapidly.
Investments in fixed assets are growing at a record low rate, while bad debt rose sharply in the second quarter and unemployment rose to 5.1%.
According to Pham Cuong