China central bank boss says no major stimulus to boost economy

The country’s recovery from the impact of Covid has slowed in the months since it abruptly lifted tough restrictions in late 2022, with a property crisis and tepid consumer demand weighing on growth.

Leaders have unveiled a series of policies to boost infrastructure spending and spur consumption, but have stopped short of offering the big-spending “bazooka” called for by analysts, and which was introduced during the global financial crisis.

Central bank chief Pan Gongsheng told a financial forum in Shanghai that the economy was struggling with “insufficient effective demand, insufficiently smooth domestic circulation, and a marked rise in the complexity, severity and uncertainty of the external environment”.

But he said authorities would “avoid major easing or tightening”.

“Protecting price stability and promoting the moderate recovery of prices will be important considerations, while (we will) use interest rates, reserve requirement ratios and other policy tools flexibly,” Pan said in a speech.Beijing has set a target of around five percent growth this year, a figure seen as ambitious by many economists.China last year recorded one of its worst annual growth rates since 1990, though the first three months of 2024 outstripped expectations. And the International Monetary Fund recently upgraded its outlook for this year in light of the promise of more support measures.

A slew of measures introduced by the central government to boost the key property sector appeared to have had little effect.

But state media reports last month that the central bank and financial regulators would cut minimum homebuyer rates could herald a larger stabilisation plan, analysts said.