- Looser monetary policy suggests more concern about outlook
- Consumption is picking up but still below pre-pandemic levels
After China’s surprise central bank support last week, key economic data released on Thursday will be studied for signs the world’s second-largest economy is entering a new post-pandemic phase, where slowing momentum leads to new policy aid.
Debate is growing over whether China will shift from its gradual monetary and fiscal tightening, which began late last year after a rapid V-shaped recovery from the coronavirus pandemic. While the People’s Bank of China has said the cut to the reserve requirement ratio last week was a liquidity operation and not a sign of a change in policy direction, the sudden and broad move took many by surprise and stoked concerns about the growth outlook.
Tom Hancock, Lin Zhu, and Bihan Chen | Bloomberg