China's cabinet is soliciting proposals from economists and advisers, policy insiders told Reuters, with big changes needing approval from top party leaders, and investors now looking to an expected Politburo meeting in July for clues on policy direction.
However, the modest borrowing cost cuts - limited by concerns over banks' profitability and currency stability - will not be enough to boost economic activity, policy insiders said.
Authorities are also considering support for the ailing property sector after earlier measures failed to gain traction, including easing credit conditions and home buying curbs in some areas, policy insiders.
Economists blame the fading recovery on the "scarring effects" caused by COVID and regulatory curbs on property and tech sectors, which have hit household and private sector spending.
Supporting depressed private-sector firms, which account for 60% of economic output and 80% of urban employment, will be essential to lift incomes, jobs and consumption, policy insiders and analysts said.
Persons:
Rory Green, Jia Kang, Kevin Yao, Sam Holmes
Organizations:
quicken, Reuters, People's Bank of China's, TS Lombard, China Academy of New, Economics, Thomson
Locations:
BEIJING, China, Beijing