China could be about to ease monetary policy, given a slowdown in the economy and hints in the last week by Premier Li Keqiang, news website Caijing.com.cn reported Monday.
Touring Chifeng in Inner Mongolia last week, Li said the authorities had to tackle the high financing costs facing small and micro enterprises through adequate policy tools and timely policy fine-tuning. The government also had to maintain reasonable growth of money supply and credit loans, he said, according to official media.
Li’s comments were seen as a sign that monetary policy might be eased and that rather than launching new stimulus measures, the government will focus on deploying existing ones.
First-quarter economic data revealed negative export growth, suggesting that the central government will have an uphill battle to meet its growth target for this year. Second-quarter data will hold to the key to whether there will be policy easing in the second half of the year, the report said.
The Political Bureau of the CPC Central Committee will meet by the end of July — and after the 2Q data is released — to discuss economic conditions and goals for the second half. The gathering should give clues on any policy changes but macroeconomic policy is expected to stay unchanged until then.
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