China’s overall debt has exceeded 300% of GDP, prompting the central bank to maintain an easing monetary policy. Deputy Governor Xuan Changneng confirmed that measures such as interest rate cuts will be implemented at an appropriate time. Global financial uncertainties and ongoing economic pressures, particularly from rising U.S. tariffs, influence these strategies.

The People’s Bank of China has reported that the nation’s overall debt has surpassed 300% of GDP and is anticipated to continue its ascent. Deputy Governor Xuan Changneng conveyed that the bank remains committed to implementing looser monetary policies as necessary during the annual Boao Forum. He stated, “China’s stance on implementing an appropriately loose monetary policy is clear, and there is ample room for monetary policy manoeuvres.”

Currently, the M2 money supply to GDP ratio has exceeded 200%, and the macro leverage ratio, reflecting the overall indebtedness of the economy, has also risen beyond 300%. Xuan emphasized that these indicators are likely to continue their upward trajectory as the government aims to stimulate economic growth. He assured that the central bank would consider cuts to the reserve requirement ratio and interest rates when deemed suitable, influenced by both domestic and international economic conditions.

The global landscape poses “unprecedented” uncertainties, significantly affecting central bankers due to geopolitical tensions and de-globalisation, along with increased volatility in global financial markets. Analysts predict that the People’s Bank of China will likely ease monetary policies further, responding to economic pressures exacerbated by rising U.S. tariffs, particularly as it has maintained steady interest rates and reserve requirements in recent months.

In summary, the People’s Bank of China’s acknowledgment of rising debt levels above 300% of GDP highlights a crucial economic challenge. The commitment to easing monetary policies is set against a backdrop of burgeoning economic uncertainties and the need for continued growth support. The central bank’s potential adjustments will remain contingent upon both internal and external economic dynamics.

Original Source: www.tradingview.com

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