China must take strong stimulus measures to support growth: state media

China must take strong stimulus measures to support growth, with the country in a “critical” period of stabilizing its economy, according to a commentary in the Global Times, a state-backed Chinese tabloid.

Chilling global markets on Monday, Chinese shares .CSI300.SSEC slumped and the yuan CNY=CFXS fell despite Beijing saying it would slash the amount of cash that commercial lenders need to set aside, releasing a net 750 billion yuan ($108 billion) into the banking system. The planned cut to banks’ reserve requirement ratios (RRRs) would be the fourth reduction this year as China loosens credit conditions to support businesses and calm market jitters amid an intensifying trade war with the United States.

Economists predicted further RRR cuts ahead, though the central bank is not expected to lower its benchmark interest rates – unchanged since October 2015 – in the near term. China has repeatedly said it will not resort to massive stimulus. In an English-language commentary, the Global Times wrote that perhaps China is unable to overcome these pressures by simply continuing to fine-tune its economic policy.

“In 2008, the Chinese government announced a 4 trillion yuan ($578 billion) stimulus package to fight the impact of the global financial crisis. Now, the Chinese economy is under even tougher pressure amid escalating trade friction,” it said. The latest RRR cut is unlikely to change the risk appetites of China’s top commercial banks, S&P Global Ratings said on Tuesday. These banks traditionally serve the country’s big state enterprises.

The International Monetary Fund on Tuesday cut its 2019 China growth forecast to 6.2 percent from 6.4 percent, though it kept this year’s estimate at 6.6 percent. China aims to expand its economy by around 6.5 percent in 2018.