China Needs to Boost Government Borrowing, Policy Adviser Says
- Rapid moves needed to avoid a ‘balance sheet recession’: Liu
- NIFD researcher calls for more sovereign bond issuance
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China can avoid a “balance sheet recession” if authorities take decisive actions to boost government borrowing and spending to stimulate the weakening economic recovery, a state think tank researcher said.
Contrary to economists who say high debt limits Beijing’s ability to add significant stimulus, the government still has ample space to leverage up in part because it owns massive state assets, Liu Lei, a researcher at the National Institution for Finance and Development, said in an interview. The think tank writes reports on areas such as China’s debt, financial risks, and the banking sector, and recommends policies to various government agencies.