Weekend Long Read: What’s Left in China’s Economic Policy Tool Kit?

Since April, a variety Chinese economic and financial data points have come in below expectations. To prevent a slowdown in growth, it is highly probable that policymakers will have to take action. So what tools do they have at their disposal and which ones will they employ?

We believe there are six main tools that policymakers will make use of in the second half of this year: monetary policy easing, policy financial tools, local government special bonds, consumer spending stimulus from fiscal funds, special treasury bonds, and the relaxation of property market restrictions in some cities accompanied by a boost in financing support from the central bank.