Friday, April 17, 2015
'Reform or stimulus' policy divide grows as China slows
With China's economic growth heading for a quarter-century low, think-tanks and advisers to the government are polarising into those calling for more stimulus to arrest the slowdown and a rival camp emphasising structural reforms as the route to sustainable growth. The debate among the think-tanks, which influence decision-making but do not wield direct power, is reflected in the ambivalent mood music coming from China's leaders, who accept the need to adapt to a "new normal" of slower but better quality growth, while fretting that a deeper downturn could fuel debt defaults, unemployment and social unrest. To prevent growth from dipping below 7 percent, some economists are urging Beijing to step up policy support on top of the two interest rate cuts since November and a reduction in the level of deposits banks must hold in reserve. "The real downward pressure may be even bigger than the headline figures," said an economist who advises the government.
Tags: World News
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