China unveils stimulus policies to support virus-hit economy

China unveils stimulus policies to support virus-hit economy

Context: China’s Cabinet unveiled a package of 33 measures covering fiscal, financial, investment and industrial policies on Tuesday to revive a pandemic-ravaged economy, saying it will inspect how provincial governments implement them.

Concept:

What is stimulus?

• Economic stimulus is action by the government to encourage private sector economic activity by engaging in targeted, expansionary monetary or fiscal policy based on the ideas of Keynesian economics.
• Economic stimulus is commonly employed during times of recession.
• Policy tools often used to implement economic stimulus include lowering interest rates, increasing government spending, and quantitative easing, to name a few.