BEIJING (Reuters – China’s State Council newspaper warned against simplistic interpretations of monetary policies as easing expectations grew. It suggests that China has not yet unleashed a massive credit panic.

After Premier Li Keqiang, who said Friday that banks will reduce the cash they keep in reserves “in a timely manner”, expectations that the central bank will relax policy are on the rise. This is amid growing economic headwinds caused by a more troubled property market and increasing economic uncertainty.

The Economics Daily commented Monday that this was a simplistic view of macropolitical policy and could lead to misunderstandings.

The commentary states that China’s future monetary policy will place greater emphasis on continuity and stability, while also taking into account short-term as well long-term goals.

China Evergrande Group, a property giant with a high level of debt, warned Friday that it was not certain it could have sufficient funds to pay its debts.

Due to the expectation of easing, China’s 10-year Treasury Bond yield fell nearly 5 basis points on Monday morning.

Analysts at Nomura stated in Monday’s note that they expected the economy and property sector to continue to decline further. Beijing will likely need to increase its policy easing in spring 2022 in order to avoid a difficult landing.

The financial newspaper said that there was no possibility for a tsunami of stimulus funds to support the economy. China’s policies would be more focused to deal with any downturn.

In addition, it stated that there will be an increase in coordination among monetary and fiscal policies.

Following a large-based reduction to the reserve amount that banks were required to keep in cash during July, the Chinese central banking has defied market expectations by easing its policy.

Some advisers previously told Reuters that government advisors will suggest setting a target for economic growth in 2022 below the 2021 target of “above 6%”, which was set in 2021.