China Economy Can’t Recover in Isolation
Aggressive monetary and fiscal policies put in place over the past few months are being “effective” in supporting China’s economy but the “current improvement is not solid,” said Chen Deming, China’s minister of commerce.
“We still see some factors of instability,” including the lack of a notable increase in private sector investment, Chen said in response to questions after a speech to the Chicago Council on Global Affairs.
China’s central bank has slashed interest rates five times since September 2008 to the current 5.31 percent on the benchmark one-year yuan lending rate, and a major fiscal stimulus package, estimated at some $586 billion over two years, was announced in November.
Some of China’s new programs are aimed at spurring domestic consumption. Still, “without the world economy, without the U.S. economy improving, it’s impossible for the Chinese economy to improve on its own,” Chen said.