China is likely to incur “huge economic losses” if it goes for monetary policy tightening in order to curb asset bubbles, Bloomberg reports, citing comments from Sheng Songcheng, a former director of the People’s Bank of China’s (PBOC) statistics and analysis department.
Key quotes
“Closer market supervision would be better than policy tightening measures to reduce speculation in financial assets.”
“Tightening monetary policy cannot effectively prevent asset bubbles, but will puncture the bubbles and bring huge economic losses.”
“Monetary policy shouldn’t tighten in the near term in part because China’s investment and consumption growth rates have not fully recovered from the pandemic.”
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