Calls for stimulus package grow in China

At least 11 mainstream Chinese economists have called for the government to increase spending and direct aid to low-income groups, the Beijing-based analyst Zichen Wang wrote in his newsletter Pekingology. The economists are all affiliated with the state and the Chinese Communist Party, and most agree that Beijing has been “reluctant” to offer state assistance to citizens. The CCP has argued that offering aid would “encourage laziness,” but as some of the economists have noted “it’s difficult to tell ‘who is lazy and who is not,’” Wang reported.

China has been stuck in a poor economic cycle for years, finance journalist Milton Ezrati wrote in Forbes. But Beijing is slow to respond to the nation’s needs, and “has either ignored the problems or put forward inadequate or ill-conceived policies,” he wrote. Issues with the Chinese economy are visible across sectors, Ezrati noted, but are most prevalent in housing. Home sales have fallen steadily, which in turn has cooled consumer spending. The sector has struggled despite a 500 billion yuan ($70 billion) infusion from Beijing aimed at stimulating the market.

As of Wednesday, Beijing had only distributed a fraction of the $70 billion it earmarked to rescue China’s beleaguered property developers, the Financial Times reported. “The sums being deployed so far are still too small to make a meaningful difference to overall housing demand and developer finances,” two financial analysts told the FT. Disagreements about property pricing have slowed the program’s roll out, thwarting plans to buy unsold stock and boost the real estate sector.