After announcing an injection of about 2 trillion yuan ($283 billion) into China’s ailing economy in late September, Beijing has kept the world waiting for a significant spending package as a follow-up to the huge monetary stimulus.
However, at high-profile press conferences on Oct. 8 and Oct. 12, senior leaders discussed an upcoming fiscal stimulus extensively, but stopped short of specifying details.
As the market anticipated an accompanying fiscal policy to stimulate spending, experts pondered the necessary scale.
Prominent economists in China, including Jia Kang and Liu Shijin, told Chinese media that the number would need to be 10 trillion yuan ($1.42 trillion), or about 8 percent of China’s 2023 gross domestic product (GDP).
On Oct. 11, Yu Yongding said Chinese institutions have floated various amounts to achieve the 5 percent growth target, ranging from 8 trillion to over 10 trillion yuan. Yu’s own estimate is over 10 trillion.
Daniel Rosen explained the needed stimulus size further at a think tank event in Washington on Oct.9. If China needs a stimulus of over six trillion yuan to meet the growth target, “that means they are growing zero percent this year,” he said.
Some experts have gone further and say it’s time to view China’s economy through the lens of survival rather than growth.
“The Chinese economy is not seeking growth anymore; it’s seeking survival,” Mike Sun told The Epoch Times.
Christopher Balding agreed that survival is an “appropriate” description of the current Chinese economy.