Key facts
- Chinese economists Yu Yongding and Huang Yiping advocate for increased fiscal spending.
- They also call for increased leverage to address weak domestic demand.
- The proposals aim to boost consumer confidence.
- The stimulus is intended to support local government and business balance sheets.
- Weak domestic demand is a key concern addressed by the economists.
- Yu Yongding is a former member of the People's Bank of China's monetary policy committee.
- Huang Yiping is a professor at Peking University.
Two prominent Chinese economists, Yu Yongding and Huang Yiping, have urged for a significant increase in fiscal spending and the use of greater leverage to address China's persistent issue of weak domestic demand. Their recommendations are aimed at bolstering consumer confidence, which has been lagging, and providing crucial support to the balance sheets of local governments and businesses. The economists believe that a more proactive fiscal policy is necessary to stimulate economic activity and ensure a more robust recovery. Yu Yongding, a former member of the monetary policy committee of the People's Bank of China, has previously advocated for more aggressive stimulus measures. Huang Yiping, a professor at Peking University, has also expressed concerns about the current pace of economic growth and the need for policy adjustments. The call for increased fiscal stimulus highlights ongoing concerns within China's economic circles about the effectiveness of current policies in rebalancing the economy towards domestic consumption. By encouraging greater spending and leverage, they hope to create a virtuous cycle of increased economic activity and improved financial health for key economic actors. This approach seeks to counter deflationary pressures and foster a more dynamic internal market, which is seen as essential for long-term sustainable growth.