WSJ Chinese edition reported that the Chinese regime could only take limited measures to boost the stagnant economy due to economic growth losing momentum.

China’s central bank cut interest rates on August 15th as economic data showed economic activity slowed in July. However, unlike in the U.S., interest rates in China have had a limited impact.

Therefore, economists believe the cuts may discourage households and businesses from borrowing more, which the Chinese regime hopes could help revive the economy.

In response to the 2008 global financial crisis, the regime launched an economic stimulus package of more than $58.6 billion. At the time, it was equivalent to nearly 13% of China’s GDP.

At a meeting last month, the top decision-making body of the Communist Party of China did not announce measures to boost the economy as some expected.

Nicholas Borst, director of China research at Seafarer Capital Partners LLC, said there are now some real fiscal bottlenecks in China. They didn’t appear in 2008.

Borst said, overall, the level of indebtedness of the Chinese economy is much higher now than it used to be.

According to Borst, China’s total debt, including central and local authorities, was estimated at 120% of GDP in December, up from 60% in 2014. Additionally, other forms of debt have increased rapidly.

According to WSJ, the burden of stimulating the economy in China often rests with local authorities. But this year, their finances have become more strained as the income from real estate transactions has decreased significantly.

Another problem for China is that any economic stimulus measures the regime takes now could be affected by the Zero-Covid policy they don’t want to give up. The policy has heavily affected business and consumer confidence.

The Shanghai lockdown has caused widespread damage to the sales of consumer goods. For example, Adidas AG says its sales in Mainland China have dropped 35%. Harm Ohlmeyer, the company’s chief financial officer, forecasts that the company’s sales in China will fall by double digits for the entire year.

Ohlmeyer said that Adidas AG no longer expects sales in China to recover in the year’s second half.

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