China Can Borrow More to Revive Economy, Ex-PBOC Official Says
- Weak household and business sentiment limit impact from easing
- Bond issuance, RRR cut more useful, Sheng Songcheng says
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China’s fiscal policies need to play a bigger role in helping the economy since cutting interest rates would likely encourage people to save rather than spend, according to a former central bank official.
Sheng Songcheng — a former director of the People’s Bank of China’s statistics and analysis department — argued that China’s macroeconomic conditions are not suitable for sustained rate cuts. Authorities should instead consider issuing more central government bonds and making more cuts to bank reserve requirements, he said.