The Chinese government launched a “fresh round of mini-stimulus” to counter growth headwinds, according to a Bank of America Merrill Lynch (BofA-ML) report published Thursday.
The measures aim to support the agricultural sector, boost investment in public facilities and improve environmental protection.
The People’s Bank of China (PBOC) has given banks a larger re-lending quota at lower rates to support the farm sector. It granted a 20 billion yuan ($3.26 billion) re-lending quota to its local branches to guide rural financial institutions to step up lending support to the sector, it said on its website late Wednesday.
Re-lending is a monetary tool used by the central bank to increase financial institutions’ liquidity and guide credit flows.
Other measures include a “push for ramping up investment in clean energy and public facilities such as hospitals, nursing homes and fitness centers, and a promise for delivering the target on social housing and more spending on environmental protection,” Ting Lu and Sylvia Sheng, economists at BofA-ML wrote.
These steps will help China deliver the “around 7.5 percent” growth target, BofA-ML said, noting that it’s comfortable maintaining its gross domestic product (GDP) growth forecast of 7.4 percent for the second half.
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