Beijing takes a gamble on debt
SHANGHAI — As China’s economy slows and the trade war with the United States intensifies, Beijing’s economic bosses are swinging into action.
Chinese officials are pushing banks to lend more and allowing indebted local governments to spend money on big projects again. They have moved to shore up the value of the country’s currency. They have also helped out the stock market, say financial analysts, as the government works to avert a stock market collapse like the one three years ago that shook the world.
“It’s a line in the sand for the leadership” of China, said Hao Hong, research director for the international operations of the Bank of Communications, a Shanghai-based financial institution.
China is taking action as its problems mount. On Thursday the United States formally enacted its previously threatened tariffs on $16 billion in Chinese-made goods. Beijing said it would immediately retaliate with its own tariffs and file a complaint with the World Trade Organization. The moves intensify a trade war that has already affected more than $100 billion of goods and cast a shadow over growth prospects for China and the world.
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