China’s marked economic slowdown in the second half of the year is testing the central bank’s policy mettle and dividing economists over whether more aggressive action is needed to avoid a deeper downturn, Bloomberg News reported. The People’s Bank of China is having to juggle multiple economic risks, pulling policy in different directions. Growth is heading for lows not seen since 1990 -- if last year’s pandemic year is excluded -- factory-gate inflation is soaring, while the currency is rallying on the back of record trade surpluses. On top of that, the U.S. and Europe’s imminent scaling back of pandemic stimulus is squeezing China’s room to loosen policy. The PBOC has refrained from any significant easing measures since its surprise cut in the reserve requirement ratio in July. It’s opted instead for a targeted approach: providing support to small businesses and green sectors, and relaxing some restrictions on property financing and mortgage lending. The State Council, China’s cabinet, said in a statement Monday the PBOC and regulators should use various financial tools to boost liquidity to smaller businesses. Premier Li Keqiang also echoed those sentiments Monday, saying the economy faces “new downward pressure” and the focus should be on supporting small firms. Read more.