China’s economic slump calls for fresh stimulus spending
CHINA’s economy took a knock recently due to ongoing property market slump and sporadic Covid crisis outbreaks, calling for more stimulus, reports Bloomberg News.
Residential property sales dropped 20 per cent from a year earlier, pulling down the pace of overall investment spending in the economy.
Retail sales growth weakened to 3.9 per cent in November as people stayed home amid renewed virus outbreaks.
China has recently shifted its focus to stabilising growth, with the central bank easing monetary policy and the government ordering more spending early in 2022.
“Demand on the investment side has been extremely weak and we need to see more easing measures,” said Greater China at BofA Global Research chief economist Helen Qiao.
China’s policy shift stands in contrast to the US, where the Federal Reserve is set to accelerate the pace of tapering asset purchases.
Industrial output rose 3.8 per cent from a year earlier, but the property market is weighing on the industry too, with the production of property-linked commodities falling 20 per cent year on year in November.
Infrastructure investment declined 4.6 per cent in November from a year earlier.
Said Greater China at Australia & New Zealand Banking Group Ltd chief economist Raymond Yeung: “Domestic consumption remains weak with retail sales disappointing. The incremental increase in the jobless rate is concerning. The authorities should pledge more support and offer a stronger signal to the market.”