(MENAFN- ProactiveInvestors - Australia) Economic restructuring efforts that include a focus on addressing structural imbalances and supporting growth are a key part of China's reform.
JP Morgan believes China will not undertake a stimulus package, underlining economic restructuring efforts that include a focus on addressing structural imbalances.
Chief China Economist Zhu Haibin said Monday the government is trying to make its fiscal policy more effective by using savings from curbs on administrative spending for "stimulus-style fiscal policies, such as tax cuts for small companies and expanding VAT reform."
"In terms of policy, one thing is clear -- there will be no stimulus package, despite the sluggish economic environment," Zhu said at a media briefing.
Regarding China's monetary policy, Zhu said the central bank is seeking to activate existing credit stock by cutting down on speculative lending and directing funds to support the real economy.
While the continuous slowdown in the economy has not triggered a change in China's general policy stance, the government's tolerance is not unlimited, Zhu added, citing the government's economic growth target of 7.5 percent for the year.
President Xi Jinping said last week that China must deepen reforms in major areas in order to eliminate institutional barriers that are restraining growth.
Stimulus green shoots
Recently China announced it would increase the speed of railway construction in the central and western regions, following comments from the Chinese Premier Li Keqiang.
It was reported last week that the State Council is targeting 690 billion yuan ($112 billion) of fixed-asset investment in the railway industry this year.
For the five years through 2015, the cabinet set a goal of investing 3.3 trillion yuan, or 500 billion yuan more than in the previous plan, according to reports.
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