Research / White PaperMar 25, 2020

Dealing with a Liquidity Crisis: Economic and Financial Policies in China during the Coronavirus Outbreak

Zhiguo He, Bibo Liu

The coronavirus outbreak that began last December sharply curtailed economic activities across China. In response to this sudden, countrywide, and potentially devastating liquidity shock, many coordinated economic and financial policies were initiated by the Chinese authorities to help the economy battle against the epidemic. In particular, policy tools are designed to support small- and medium-sized firms, and industries and regions hit hard by the outbreak. We finally discuss the effectiveness of the policy intervention based on a recent survey which covers a representative sample of public and private firms.

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