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China should not roll back its fiscal stimulus rapidly next year and maintain its accommodative monetary policy to boost the post-coronavirus pandemic economic recovery, the World Bank warned in its latest economic update on China, released Wednesday.

Key takeaways (via Bloomberg)

“A premature policy exit and excessive tightening could derail the recovery.”

“Predicts the world’s second-largest economy will grow 2% this year and 7.9% in 2021 and said the biggest risk to the outlook remains a resurgence of coronavirus.”

“Next year’s acceleration will be driven by rising private-sector investment in manufacturing and stronger household spending.”

“China could use its fiscal space to hedge against downside risks to growth and ensure a smooth rotation from public to private demand.”

“General transfers should be expanded further toward a fully-funded financing pool for universal basic public services.”

Related reads

  • China strikes a dovish tone on the policy stance – Standard Chartered
  • PBOC promises sound monetary, financial environment for 2021 – Xinhua