China has limited room for further monetary policy easing, and it should pursue structural reforms such as encouraging entrepreneurs rather than counting on macroeconomic policies to revive growth, said Liu Shijin, a member of the PBOC monetary policy committee, at a forum on Sunday.
The room for monetary policy easing for China is limited due to widening interest rate differentials with the US, he said.
Chinese governments at various levels are under fiscal stress and if China continues to focus on macro policies in its efforts to stabilise growth, there would be more and more side effects, said Liu. “More importantly, we will again miss the opportunity for structural reforms.
Liu proposed a new round of structural reforms that could support the economy in the near term while injecting long-term growth momentum, including demand-side reforms with a focus on giving migrant workers access to public services enjoyed by city dwellers and supply-side reforms that involve igniting entrepreneurship in emerging industries.