Market Commentary and Intraday News

China Could Afford Another Big Stimulus, S&P Says

300 days ago

(RTTNews) - Standard & Poor's on Wednesday said China's government has significant capacity to support economic growth, if needed.

China has not introduced any large stimulus this year despite growing economic tensions, but it remains an option if conditions deteriorate sharply, it said.

S&P's said the government may be prepared to pump money into the economy if the currently stable unemployment rate rises steeply. In such a situation, the cost of losing more inflation credibility would likely be a secondary consideration in a period of top leadership changes, it noted.

Even in a country fabled for far-sighted policymakers, near-term social stability is valued much more than long-term policy credibility, S&P said.

The agency expects 8.2 percent real growth for next year after slowing to about 8 percent in 2012.

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