China’s Current Macroeconomic Situation Calls for New Policy Support

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Jakarta, IO – The latest data from China’s National Bureau of Statistics showed that its economy grew by 4.8% in the first quarter, basically maintaining stable economic growth and picking up from the fourth quarter of last year. However, amid the intensifying geopolitical conflicts in the world and the increasing pressure on domestic pandemic prevention and control, on the one hand, the consumption data show negative growth in total retail consumption in March, and on the other hand, the real estate market is still in a downward trend with a sharp contraction in sales. Under such circumstance, China’s domestic economic situation cannot be described as “optimistic”. The impacts of internal uncertainties such as COVID-19 prevention and control measures are gradually emerging; the external situation will also become more complicated in the future, and there may be a “double tightening” in international economic growth and currency. In this context, more policy tools are needed to stabilize the country’s domestic economic fundamentals. 

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For the current Chinese economy, a top finance official recently said that the triple pressure of macroeconomic operation still exists in the first quarter of this year, while the pandemic and economic growth have also emerged some new situations and changes that require attention. In addition, there are also clearly defined corresponding policies to coordinate with economic and social development under the pandemic, while promoting economic operation to maintain a reasonable range. At present, all measures are being carried out in accordance with the requirements of making advance efforts and taking targeted measures, and more policy combinations are being studied and prepared. Researchers at ANBOUND have mentioned that the current economy needs systematic policy support, which should be reflected in policy beyond the existing overall macro policy tone.