PBOC to inject liquidity, cut broad range of interest rates
Analysts say monetary easing insufficient to curb growth risks
Calls for more government stimulus grow amid consumer weakness
BEIJINGHONG KONG, Sept 25 Reuters China39;s central bank has shifted to a more aggressive easing stance, but its policy weapons don39;t have the key enemy to economic growth in their line of sight the persistently weak consumer demand.
The liquidity injections and the lower borrowing costs flagged by the People39;s Bank of China on Tuesday have lifted market sentiment, but mainly because they raised expectations authorities will follow soon with a fiscal package to complement the monetary and financial measures.
The world39;s secondlargest economy faces strong deflationary pressures and risks missing this year39;s roughly 5 growth target due to a sharp property downturn and frail consumer confidence, which analysts say only fiscal policies that put money into consumer pockets through higher pensions and other social benefits can address.
The central bank policies exceeded expectations, but the main problem in the economy today is not the lack of liquidity, said Shuang Ding, chief economist for Greater China and North Asia at Standard Chartered.
In terms of helping the real economy, I think there will be another policy package, especially fiscal policies.
HSBC chief Asia economist Fred Neumann concurred, saying authorities must boost demand which could be done through other…