China must take strong stimulus measures to support growth: state media

Reuters  |  BEIJING 

(Reuters) - must take strong stimulus measures to support growth, with the country in a "critical" period of stabilising its economy, according to a commentary in the Global Times, a state-backed Chinese tabloid.

The planned cut to banks' reserve requirement ratios (RRRs) would be the fourth reduction this year as loosens credit conditions to support businesses and calm market jitters amid an intensifying trade war with the

Economists predicted further RRR cuts ahead, though the central is not expected to lower its benchmark interest rates - unchanged since October 2015 - in the near term. has repeatedly said it will not resort to massive stimulus.

In an English-language commentary, wrote that perhaps China is unable to overcome these pressures by simply continuing to fine-tune its economic policy.

"In 2008, the announced a 4 trillion yuan ($578 billion) stimulus package to fight the impact of the global financial crisis. Now, the Chinese economy is under even tougher pressure amid escalating trade friction," it said.

"must draw up strong stimulus policies to inject new momentum into the real economy."

The views in the newspaper, which is run by the ruling Communist Party's official People's Daily, do not necessarily reflect policy.

The on Tuesday cut its 2019 China growth forecast to 6.2 percent from 6.4 percent, though it kept this year's estimate at 6.6 percent. China aims to expand its economy by around 6.5 percent in 2018.

To assess China's economic situation, one must take a longer view and a more holistic approach, Ning Jizhe, of China's state planner, told in an interview, stressing that growth, employment, prices and international balance of payments have been stable.

"Some of the difficulties encountered by enterprises are brought about by trade frictions and some due to China's economic transformation," Ning said.

China's commerce ministry has approved six cities for a special trade programme in which exporters are exempted from a value-added tax of 16 percent, according to

Small firms with no export licenses can also bundle their products with trading firms that have permits.

Cities that would soon benefit from the programme include Zhongshan in province, Quanzhou in province and Wenzhou in province.

China will also adopt a more proactive fiscal policy, including potential tax cuts on a larger scale, state-run Agency reported on Sunday, citing

Total tax cuts for the year are expected to exceed 1.3 trillion yuan ($188 billion), according to Liu.

($1 = 6.9235 Chinese yuan renminbi)

(Reporting by Ryan Woo; Additional reporting by Stella Qiu; Editing by Shri Navaratnam)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, October 09 2018. 10:34 IST