JP Morgan: Economic restructuring key to China's reform

Economic restructuring efforts that include a focus on addressing structural imbalances and supporting growth are a key part of China's reform, JP Morgan's Chief China Economist Zhu Haibin said Monday. "In terms of policy, one thing is clear -- there will be no stimulus package, despite the sluggish economic environment," Zhu said at a media briefing. He said the government is trying to make its fiscal policy more effective by using savings from curbs on administrative spending for "stimulus-style fiscal policies, such as tax cuts for small companies and expanding VAT reform." Regarding China's monetary policy, Zhu said the central bank is seeking to activate existing credit stock by cutting down on speculative lending and directing funds to support the real economy. While the continuous slowdown in the economy has not triggered a change in China's general policy stance, the government's tolerance is not unlimited, Zhu added, citing the government's economic growth target of 7.5 percent for the year. President Xi Jinping said last week that China must deepen reforms in major areas in order to eliminate institutional barriers that are restraining growth.