China ex-central bank adviser proposes 10 trillion yuan in stimulus measures

CHINA could issue ultra-long-term treasury bonds within two years to generate at least 10 trillion yuan (S$1.8 trillion) worth of stimulus to the economy, a former central bank adviser said on Saturday, according to state media.

China should introduce a basket of measures, focusing on enhancing social protections, buying unsold apartments for affordable housing and speeding up urban construction, Liu Shijin, former vice-president of Development Research Center of the State Council, told the China Macroeconomy Forum, the Securities Times reported.

Liu said the world’s second-biggest economy should not copy the quantitative easing of developed countries because China’s macroeconomic policy should aim at ensuring stability and balance during a “medium-speed growth stage”.

Chinese policymakers will likely step up measures to at least help the economy meet this year’s increasingly challenging growth target of roughly 5 per cent, analysts and policy advisers have said, with a sharper focus on boosting demand to fight persistent deflationary pressures.

August economic data showed momentum in China’s export-led economic recovery remains frail. Domestic demand struggled to gain traction amid persistent deflationary threat. REUTERS