Bloomberg and Reuters
An official with China’s banking and insurance regulator said banks and insurers “will do their utmost” to bolster funding as China’s consumer inflation rate in June rose 2.5% from compared to the previous year, the highest in almost two years.
The authorities will support an “appropriate” acceleration of infrastructure investment as demand remains weak, and expand channels for raising long-term funds, including private capital, said Liu Fushou, chief risk officer of the China Commission. banking and insurance regulation.
Policymakers will also step up monitoring of default risks among large companies and seek to speed up the introduction of the national financial stability law, he said Saturday at the Caixin summer summit in Beijing.
The comments came as Chinese consumer prices rose 2.5% last month from a year earlier, beating economists’ expectations of a 2.4% gain, data showed on Saturday. from the National Bureau of Statistics. That’s the fastest pace in two years and compares to 2.1% growth in May.
Factory gate inflation cooled in June to its lowest level in 15 months as the country continues to buck the global trend of accelerating prices. The producer price index rose 6.1% year-on-year after rising 6.4% in May.
Also at Saturday’s conference, former finance minister Lou Jiwei said China could consider further deficit spending by central and local governments, if needed, to fund support for small businesses.
To boost consumption, some local governments have issued consumption vouchers, but these measures remain insufficient due to a severe drop in tax revenue at all levels, Lou said.
China has unveiled a series of economic support measures in recent weeks, but analysts say its official economic growth target of around 5.5% for 2022 will be difficult to achieve.