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China Should Expand Fiscal and Monetary Policy - Ex PBOC Adviser

CHINA PRESS
MNI (BEIJING)

China should pursue expansionary fiscal and monetary policy to determine the optimum economic growth rate, which may be much higher than the current target of 5.5%, Yicai.com reported citing Yu Yongding, member of the Chinese Academy of Social Sciences and former member of the People's Bank of China monetary policy committee. Yu said risks posed by inflation and too much leverage should not be a constraint on pro-growth policies given China’s high savings rate and current account surplus. He favours continued investment in infrastructure as this boosts migrant workers' income growth, which boosts consumption. Given low private sector sentiment and a liquidity trap, the government needs to rely on fiscal policy to take the lead.

MNI Beijing Bureau | lewis.porylo@marketnews.com
MNI Beijing Bureau | lewis.porylo@marketnews.com

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