In a bid to prop up economic growth, the People's Bank of China have lowered its benchmark interest rates and cut the reserve requirement ratio for several times. However, the effect of the monetary policy should not be overestimated.

Anbound’s scholars point out that as the monetary policy transmission mechanism is not functioning properly, the effect of the monetary policy in stimulating economic growth is somewhat limited.

In order to realize steady economic growth, the fiscal policy should be more proactive and it seems like the expansion of government debt is inevitable.