On May 23, Chinese Premier Li Keqiang addressed a regular meeting of the State Council, admitting that the economy’s current downward pressure continues to increase.
Accordingly, he introduced 33 stimulus measures, including 140 billion yuan (about 21 billion dollars) in additional tax rebates and 300 billion yuan (about 45 billion dollars) in railway construction.
According to the official website of the People’s Bank of China, the central bank and the China Banking and Insurance Regulatory Commission convened a meeting on May 23.
The conference has 24 major financial institutions, including the State Open Bank, Agricultural Bank of China, and China CITIC Bank, to analyze the credit situation.
The meeting held that the recent downward pressure on China’s economy has further increased. Therefore, it concluded that the financial system should further improve its political position, increase support for the real economy, and go all out to stabilize the economic fundamentals.
Bloomberg reported on May 24 that the market remains skeptical that the Chinese authorities’ stimulus measures can boost the economy while Covid containment steps cause significant disruption to business activity.
Chi Lo, a senior market strategist at BNP Paribas Asset Management, said “Since supply-chain disruptions and loss of public confidence are areas that Beijing has little control, cutting taxes and easing monetary policy are not likely to solve the problems much.”
Kelvin Wong is an analyst at CMC Markets in Singapore. Wong said, “The positive impact may be limited as policy guidance from Chinese authorities has more or less been fully priced into the markets and the latest set of tax reliefs lack details which in turn creates ambiguity.”