While the market keeps mulling over the size of Beijing’s economic stimulus, policymakers have already undertaken a significant reshuffle of the country’s financial and fiscal system, with plans to curb risks while cultivating long-term sustainability amid outsized uncertainties.
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As the question of “how much is enough” persists among financial investors, some analysts contend that Beijing actually has “more than sufficient” ammunition to deal with potential economic challenges – more firepower than was previously believed.
However, there will be legal procedures to undertake before March’s annual “two sessions” meetings. And pundits suggest that the best course of action, considering the state of China’s economic recovery and the uncertainty surrounding US relations, is for central leadership to avoid giving a stimulus figure, and to instead focus on taking sufficient steps to shore up economic activities.
“It’s not surprising that no figures have been disclosed yet,” said Xiang Songzuo, head of the Greater Bay Area Financial Research Institute in Shenzhen.
“Various signals strongly indicate that the scale of the incremental fiscal policy won’t be small,” he added.
Beijing’s war chest
There have been calls from prominent economists, including former central bank adviser Liu Shijin, for the central government to roll out a stimulus plan worth 10 trillion yuan (US$1.4 trillion).