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This is eerily similar to current US policy!
"Many local governments, bearing the brunt of economic slowdown, have been lobbying for Beijing to relax property controls and credit curbs to local projects, according government economists familiar with the policy-making process.
Local governments have seen revenues from property-related land sales tumbling, as they struggle to repay 10.7 trillion yuan ($1.68 trillion) in debt.
But Beijing has made clear that it will not repeat another massive fiscal stimulus similar to the one in 2008, which bolstered growth but left an unwelcome legacy of strong inflationary pressures and a potential property bubble.
Policymakers have so far offered a few modest and more targeted programs, such as extending a "cash for clunkers" program to boost car sales and offering incentives for consumers to buy more energy-efficient appliances.
However, analysts say the central bank may have to ease policy further by cutting banks' reserve requirement ratios (RRR) or interest rates again to help stabilize growth."
"Many local governments, bearing the brunt of economic slowdown, have been lobbying for Beijing to relax property controls and credit curbs to local projects, according government economists familiar with the policy-making process.
Local governments have seen revenues from property-related land sales tumbling, as they struggle to repay 10.7 trillion yuan ($1.68 trillion) in debt.
But Beijing has made clear that it will not repeat another massive fiscal stimulus similar to the one in 2008, which bolstered growth but left an unwelcome legacy of strong inflationary pressures and a potential property bubble.
Policymakers have so far offered a few modest and more targeted programs, such as extending a "cash for clunkers" program to boost car sales and offering incentives for consumers to buy more energy-efficient appliances.
However, analysts say the central bank may have to ease policy further by cutting banks' reserve requirement ratios (RRR) or interest rates again to help stabilize growth."
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