PBOC pares economic growth goal
effects of already-announced policies will become evident starting in the third quarter.
Recoveries in the United States and European economies are likely to support China’s export rebound. In addition, the rise of housing prices since April will accelerate property investment, according to the report.
Major economic figures for May are scheduled to be released by the National Bureau of Statistics on Thursday, and analysts’ consensus is for some slight improvement.
Credit ratings agency Moody’s Investors Service Inc released a report on Wednesday, saying that the number of companies inChina in financial distress will rise as slower domestic economic growth and the government’s reform agenda, intended to allow markets to play a “decisive” role, expose overstretched balance sheets in the corporate sector.
“But policy easing and government support will prevent rising corporate distress from escalating to a level that would cause systemic risk to the onshore and offshore markets,” it said.
It added: “Room is also available for a further loosening of monetary policy should macroeconomic conditions continue to deteriorate, given that real lending rates and the reserve requirement ratio remain high.”
Compared with other emerging markets, China has a more stable economic foundation, so the expected move by the US Federal Reserve to raise interest rates will have merely a limited impact on the country’s financial system, the PBOC report said.
However, capital outflows and currency depreciation in other emerging economies may cut China’s exports, it said.
Ma Jun, chief economist at the People's Bank of China