Beijing/Washington: China criticised that the financial aid announced by the United States and the other developed countries, given the Coronavirus pandemic, can have detrimental effects on the global economy. Guo Shuqing, Chief of the Chinese Central Bank, said that the massive aids announced by the United States for recovering economies had created huge bubbles in the global economy, and China is worried about them.
The global economy has been severely hit because of the Coronavirus pandemic, which originated in China. Many leading countries, including the United States and the European countries, faced an economic slowdown. The intensity of social problems, along with unemployment, has increased. To bail the economies out of this, the developed countries announced massive financial aid packages last year, and there are indications that there will be an addition of USD 2 trillion to this. The European Union has sanctioned USD 2.2 trillion for its member countries. Senior Chinese official Guo Shuqing claimed that these aid packages have a detrimental effect on the global economy.
Shuqing warned, ‘Additional capital has become available in the markets of these countries because of the financial aid received from the United States and European countries. This has resulted in an inordinate increase in the costs of many factors, including real estate. If a big gap develops between the real economy and the financial markets, it could be the beginning of many other problems. There is an impending threat of crash in the stock markets in the near future.’
Guo Shuqing, who is the Chief of the Chinese Central Bank, warned that the stock market in the United States is the biggest threat to the global economy. The Chinese official advised that the United States and the other developed countries should pay attention to the effects of the financial aid announced by them on the rest of the world. Shuqing said that the effects of the aid have already started becoming visible.
Before Shuqing, formal Chinese Finance Minister Lou Jiwei also had criticised this US policy of financial aid.