China will increase economic stimulus to fight deceleration

China will increase economic stimulus to fight deceleration

China is going to come up with a number of measures stimulate surge against the backdrop of a trade conflict with America, although there’s limited room for hawkish stimulus in the Chinese economy already impacted by huge debts and also a property market prone to credit-powered spikes, as some policy insiders point out.

The Asian country’s deepening economic deceleration has fanned market hopes for a huge spending binge, in particular if the bruising tariff conflict with America escalates, thus increasing pressure on Chinese jobs and affecting social stability.

The given move, plans for which have frequently been denied by China's key statesmen, would come at a price. Nevertheless, similar moves in the past managed to drive surge rates, although they buried the world's number two economy under an enormous pile of debt.

The Chinese cabinet doesn’t have enough room for a strong stimulus, and risks are high due to the fact it will mainly rely on a flood of cash as well as increased leverage in the national economy, as some insiders familiar with the situation revealed.

In the 2008-09 global financial meltdown, the Chinese government came up with a 4 trillion Yuan spending package to neutralize a downturn, which cost 20 million jobs in a matter of months, rapidly regaining surge, although prompting a credit explosion.

The obsession of China's statesmen with stability resulted in policy easing in 2012 and also 2015 - a year that brought a stock market crash, a dive in the Chinese Yuan as well as steep capital outflows, which further increased debt levels and ramped up home prices.

The Chinese government has taken a raft of pro-surge moves in the past year. The measures included cuts to the levels of cash financial institutions are bound to hold as reserves to back lending, tax cuts as well as efforts to speed up infrastructure spending.


Markets Assess US-China meeting
Markets Assess US-China meeting

Hong Kong’s HK 50 index rose and the Chinese yuan edged up as traders assess the outcome of the first virtual meeting between US President Joe Biden and Chinese leader Xi Jinping.

Latest news

FED and BOE Make Another Attempt to Beat Inflation
FED and BOE Make Another Attempt to Beat Inflation

The Federal Reserve (Fed) will announce its Interest Rate Decision and make a statement about the future monetary policy on Wednesday, September 21, GMT+3. After the higher-than-expected inflation numbers published on September 13, there’s almost no doubt the Federal Reserve will come up with another 75-basis-point rate hike. However, surprised by the CPI numbers, several Fed members announced the possibility of a 100-basis-point rate hike on Wednesday.

Deposit with your local payment systems

Feel the Team Spirit

Data collection notice

FBS maintains a record of your data to run this website. By pressing the “Accept” button, you agree to our Privacy policy.


A manager will call you shortly.

Change number

Your request is accepted.

A manager will call you shortly.

Next callback request for this phone number
will be available in

If you have an urgent issue please contact us via
Live chat

Internal error. Please try again later

Don’t waste your time – keep track of how NFP affects the US dollar and profit!

Beginner Forex book

Beginner Forex book will guide you through the world of trading.

Beginner Forex book

The most important things to start trading
Enter your e-mail, and we will send you a free Beginner Forex book

Thank you!

We've emailed a special link to your e-mail.
Click the link to confirm your address and get Beginner Forex book for free.

You are using an older version of your browser.

Update it to the latest version or try another one for a safer, more comfortable and productive trading experience.

Safari Chrome Firefox Opera