According to Morgan Stanley's American Investbank Economists, China has to spend about $ 1.4 trillion in the next two years to combat deflation, slow the economy and ensure sustainable GDP growth. This is an amount that is 2.5 times higher than the cost of economic incentives after the 2008 world financial crisis.
According to estimates, some of these funds should be sent to stimulate household consumption, not just investments, benefits, business loans and infrastructure construction. Experts believe that actions need to be taken urgently, as prolonged deflation will require more and more money to overcome it.
China's chief economist in Morgan Stanley Robin Sin notes that a significant part of the funds should be spent on improving social protection and health care for about 300 million domestic migrants in China. In addition, it is necessary to implement measures to accelerate the sale of already built but unclaimed housing to stabilize real estate prices and remove the market from a long crisis.
