An influential quarterly economic report by China’s Capital University of Economics and Business has called for more monetary easing this year to back up CNY1 trillion in additional fiscal stimulus announced last week and for a target to boost GDP by more than 5% in 2024 as well as structural reform to increase potential growth.

The People’s Bank of China should cut its 7-day repo and medium-term lending facility rates by 20bp each and reduce reserve requirements by 50bp for the rest of 2023 to boost growth to the current potential of around 5.4%, the university’s Professor Chen Yanbin told a financial forum on Monday as he presented the report. (See MNI: China Stimulus To Keep 2024 Growth Over 5%, Advisors Say)

Structural reforms should be undertaken to boost potential growth to 6%, he said, pointing to low rates of return which are undermining private investment and calling for a better distribution of demand and income.