Ex-PBOC Official Warns More Reserve-Ratio Cuts Risk Asset Bubbles

The video discusses the Chinese economy's response to the global trade war, focusing on targeted stimulus measures like reserve ratio cuts by banks. It highlights recent economic data showing a stabilization in growth, despite distortions from the Lunar New Year. However, concerns are raised about excessive stimulus leading to asset bubbles and inflation, particularly in the property market. An official from the PBOC warns that further reserve ratio cuts could exacerbate these risks.

What has been a significant measure taken by Chinese banks to support the economy during the trade war?

• Increasing interest rates

• Cutting reserve ratio requirements

• Reducing government spending

• Raising taxes

What is a common distortion in economic data during January and February in China?

• Lunar New Year distortion

• Summer holiday effects

• Winter solstice impact

• Monsoon season variations

What concern does the former PBOC official express about excessive stimulus?

• It might cause a rise in asset bubbles

• It might lead to a decrease in foreign investments

• It could lead to a decrease in exports

• It could result in a stronger currency

What is a potential consequence of cutting reserve ratios when the economy is stable?

• Lower property prices

• Higher inflation

• Decreased inflation

• Increased unemployment

Why is the property market a concern for Chinese officials in the context of risky assets?

• It could become destabilized

• It is considered too stable

• It is experiencing rapid growth

• It is attracting too many foreign investors