China Signals Bank Reserve Cut to Boost Economy

The transcript discusses China's economic strategies amid external pressures like the US-China Trade War. The State Council is considering tools such as reserve requirement ratio cuts and special bonds to stimulate the economy. Economists predict GDP growth below 6%, which is insufficient for China's goals. The government has implemented tax cuts and revamped interest rates to boost spending and liquidity. Despite these efforts, the economy faces challenges, including record private bond defaults. Future strategies may include further rate cuts, but China aims for moderate policy changes to avoid economic risks.

What economic tool is the State Council considering to stimulate the economy?

• Reducing infrastructure spending

• Raising taxes

• Cutting the reserve requirement ratio

• Increasing the reserve requirement ratio

What has been the impact of the US-China Trade War on China's GDP forecast for 2020?

• It has increased the GDP forecast to above 6%

• It has doubled the GDP forecast

• It has had no impact on the GDP forecast

• It has lowered the GDP forecast to below 6%

What recent economic challenge has China faced according to the data?

• Elimination of private bond defaults

• Stability in private bond defaults

• Increase in private bond defaults

• Decrease in private bond defaults

What additional measure are economists expecting to reinforce interest rate reforms?

• Introduction of a medium-term lending facility

• Increase in the benchmark lending rate

• Decrease in tax rates

• Increase in infrastructure spending

Why is China cautious about not opening the stimulus floodgates?

• To decrease foreign investment

• To increase inflation

• To reduce government spending

• To avoid economic bubbles or risks