China still has more room and tools in its monetary policy to tackle downward pressure in the economy, and its fiscal policy will be more proactive, central bank governor Zhou Xiaochuan said on Friday.…Seems clear that the PBOC will support fiscal policy rather than counter it to manage inflation, as Western central banks do.
OAN
China Central Bank Head Says China Has More Room To Support Economy
Reporting by Samuel Shen and Jason Subler; Editing by Shri Navaratnam
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Zhou said in Caixin the interview that there’s no basis for continued yuan depreciation, that the nation’s balance of payments is good, capital outflows are normal and the exchange rate is basically stable against a basket of currencies. China has no incentive to depreciate the currency to boost net exports, and there’s no direct link between the nation’s gross domestic product and its exchange rate, he said.Bloomberg, PBOC's Zhou Says China Still Has Monetary Space to Aid Economy
as 900% interest rates in Zimbabwe (not to mention every other high \ hyper inflation episode) demonstrate, monetary policy is never more powerful than fiscal policy. Because monetary policy affects Govt interest spending, monetary policy is quite literally fiscal policy to some degree, it doesnt work the other direction at all.
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