The People’s Bank of China made it clear that it isn’t planning much more stimulus for the country. The world’s second-largest economy is recovering from the coronavirus shock. Guo Kai serves as a deputy director of the monetary policy department. According to his information, once policies and measures completed their mission, they have exited.
For example, he mentioned two special loan programs worth a combined 800 billion yuan ($114.29 billion). Both of them completed their respective purposes in support of the production of medical supplies, as well as the resumption of work.
As a reminder, during the first three months of the year, the local economy contracted by 6.8%. Importantly, more than half of the country made the decision to prolong a Lunar New Year holiday shutdown by at least a week in February. The country wanted to limit the spread of the COVID-19 by doing this.
The outbreak stalled within the country by mid-March. However, coronavirus reached most countries around the world. At the moment, the number of coronavirus cases has surpassed 13 million.
Furthermore, the world economy is likely to fall into a recession in 2020. Governments made a number of tough decisions to cope with coronavirus. As a result, the demand for exports from China could fall. Despite all the challenges, analysts still expect the local economy to grow this year.
Central bank and enterprises
The country’s central bank conducted a survey. According to this survey, out of 10,000 enterprises, 90.7% of those in the services industry reopened as of June 15. Moreover, when it comes to industrial work, the utilization of equipment was at the same level as in the second quarter in 2019.
It is worth mentioning that China is set to release second-quarter gross domestic product (GDP), as well as other important economic data, this week.
Based on the information provided by the People’s Bank of China, in the first six months of the year, Chinese banks loaned a record high of 12.09 trillion yuan. This amount is roughly equivalent to Canada’s GDP.
Interestingly, the bank’s reserved tone on an additional stimulus for China comes at a time when the country wants to reduce its reliance on high debt levels. However, Chian wants to reduce its dependence on the debt and to maintain economic growth simultaneously.
The coronavirus pandemic is a serious problem, not only for the local but for the global economy as well. China and other countries should work together to get the global economy back on track.