China announces $72B loan program to boost private consumption

China announced a $72 billion state-backed loan guarantee program aimed at boosting flagging private consumption.

Experts have long urged Beijing to increase domestic demand in order to rebalance its investment- and export-dependent economy: China ran a record $1.2 trillion global trade surplus last year.

Persistent signs of deflation, trade tensions with the US, and flatlining growth appear to have pushed Chinese authorities to accelerate what had previously been lackluster efforts to do so.

Beijing has “no choice” but to shift to local consumption, a former deputy governor of China’s central bank said in Davos, while the country’s vice premier has vowed to turn it into “the world’s market” in order to reduce trade imbalances.