By South China Morning Post | Created at 2024-11-10 22:31:52 | Updated at 2024-11-18 01:34:28
1 week ago
Huang Yiping is dean of the National School of Development at Peking University and sits on the Monetary Policy Committee of the People’s Bank of China and the Hong Kong stock exchange’s Mainland China Advisory Group. Previously, Huang was a senior economist with Barclays and Citigroup in Hong Kong.
In this interview, Huang discusses trade prospects during a second Donald Trump administration and the details of his idea for a “Chinese Marshall Plan”. For other interviews in the Open Questions series, click here.
On Friday, China’s top legislative body announced an additional 6 trillion yuan (US$838.1 billion) in hidden debt relief for local authorities, with more support pledged for next year. How helpful is this? With Donald Trump set to return to power, should Beijing roll out more stimulus?
The debt swap plan can take some immediate pressure off a lot of local governments, and thus lessen their “contraction effects” when it comes to putting Beijing’s stimulus into place.
The “contraction effects” stem from the fact that many financially strapped localities cannot effectively implement pro-growth measures, and their inability to do more due to tight finances is diluting Beijing’s growth push.
My advice is the central government raise its deficit ratio, to bear more debts in next year’s budget and expand the incomes of local authorities.
Donald Trump is very likely to further hike tariffs to target China. Beijing should take precautions by rolling out more measures to stabilise and spur domestic demand.
