Forget big-bang stimulus, China needs “acupuncture-style” treatment to heal its economy that is headed for its slowest pace of expansion in a quarter of a century, says Li Daokui, former adviser to the People’s Bank of China.
“The timing is right for the central policymakers to put together what I call acupuncture-style stimulus, not massive stimulus, to restart the economy,” Li told CNBC on the sidelines of the World Economic Forum in Dalian, China, referring to the ancient Chinese practice of inserting thin needles into the body at specific points for pain relief.
The stimulus needs to hit “key nerve points of the economy” without upsetting its overall tempo, Li, who is now a professor at Tsinghua University, said.
China’s economy has slackened considerably in recent months, with some economists now projecting growth could fall below 7 percent in the third quarter. The world’s second largest economy expanded 7 percent in the first and second quarter.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.