BEIJING- China’s central bank should develop new policy tools to help boost consumption, while beefing up efforts to support property and capital markets, a central bank adviser said in remarks published on Tuesday.
China should “explore the establishment of structural monetary policy tools related to consumer spending” by prodding financial institutions to issue more consumer credit, Wei Gejun, an adviser to the People’s Bank of China (PBOC), told the official China Securities Journal in an interview.
“This approach aims to create a virtuous cycle where government policies stimulate consumption, consumption drives the market, the market guides enterprises, and enterprises expand investment,” said Wei, who is a member of the Chinese People’s Political Consultative Conference (CPPCC), China’s top political advisory body.
As China braces for higher US tariffs that could take a toll on its exports, policymakers face increased pressure to unveil consumer-focused policies with a longer-term impact when China’s rubber-stamp parliament begins its annual meeting on March 5.
China should “expand the central bank’s macroprudential and financial stability functions in response to changing circumstances,” to help sustain economic recovery and ensuring price and financial stability, Wei was quoted as saying.
The PBOC should also shore up its policy tools to support the housing market, including expanding funding for affordable housing construction, Wei said.
Analysts polled by Reuters last month said they do not expect a recovery in the ailing property sector until 2026.
