Former Central Bank Advisor Proposes $1.4 Trillion Stimulus Package for China

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China May Issue Ultra-Long-Term Treasury Bonds for $1.4 Trillion Stimulus

HONG KONG (Reuters) - China could issue ultra-long-term treasury bonds within two years to generate at least 10 trillion yuan ($1.4 trillion) in economic stimulus, according to a former central bank adviser. Liu Shijin, ex-vice president of the Development Research Center of the State Council, spoke at the China Macroeconomy Forum, emphasizing the need for measures that enhance social protections, purchase unsold apartments for affordable housing, and accelerate urban construction.

Liu cautioned against emulating the quantitative easing strategies of developed countries, arguing that China's macroeconomic policy should prioritize stability and balance during its "medium-speed growth stage." Analysts suggest that policymakers will likely implement measures to meet this year's challenging growth target of around 5%, with a focus on boosting demand amid ongoing deflationary pressures. Recent economic data indicates that while China’s export-led recovery shows potential, domestic demand remains weak against a backdrop of persistent deflation.