China will probably need to ease monetary policy for the first time in two years in coming months to prevent the economy from losing too much momentum, according to economists who doubt the “mini stimulus” announced so far this year can do the job.
Beijing has fast-tracked spending on railways and other projects in the country’s poorer regions and also cut taxes for small businesses, in what looks like a carbon copy of the fine-tuning that helped the economy tide over a soft patch last year.
This time, though, Beijing will also need monetary easing – such as the first cut to bank reserve ratios since May 2012 – and other steps to bring the economy back to desired cruising speed, economists say.
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