Liu Shijin, member of the monetary policy committee of the People’s Bank of China (PBOC), told a financial forum in Shanghai that Beijing’s room for monetary policy easing was limited by widening interest rate differentials with the US.
On the budget front, Chinese governments are under pressure at various levels, he told the annual Bund Summit conference.
‘If China continues to focus on… macro policy in its efforts to stabilize growth, there would be more and more side effects,” said Liu, vice president of the State Council Development Research Center.
“More importantly, we will once again miss the opportunity for structural reforms.”
China’s post-Covid recovery has lost momentum due to weak consumption, falling exports and a deepening real estate debt crisis. The economy is struggling despite a raft of monetary and fiscal measures to boost confidence.
Liu on Sunday proposed a new round of structural reforms that could immediately help the economy while providing long-term growth momentum.
These include demand-side reforms that focus on giving migrant workers access to public services that city residents can enjoy, as well as supply-side reforms that aim to foster entrepreneurship in emerging industries, he said.
China’s top economic planning body announced this month that it will set up a new department to help private companies, as Beijing looks to revive investor confidence, which has been damaged by a government crackdown on sectors ranging from internet to private tutoring.
Liu said on Sunday that China must more clearly recognize the status of private companies, both ideologically and politically.