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China’s government and central bank are boosting the economy
04/13/2022, 3:05 p.m
In China, the monetary policy clocks work differently than in the western industrialized countries:
The Chinese central bank will rush to help the domestic economy, which has been hit by the Ukraine war and corona outbreaks. State media announced after a cabinet meeting that they would lower the banks’ minimum reserve ratios and also use other monetary policy instruments. The lower the reserve ratio, the more loans the financial institutions can grant. Lower interest rates are therefore also in prospect.
The government in Beijing will also increase financial support for the real economy. Consumption should also be boosted. Exporters can also expect stronger tax breaks.
The spread of the highly contagious omicron variant of the corona virus is currently causing problems in the People’s Republic. Energy prices have also risen sharply due to the Russian war against Ukraine, while important sales markets such as Europe are also likely to suffer from this development.