Although the labor force and labor-market institutions determine employment in the long run, short-run cyclical influences, such as transitory changes in spending or productivity, may cause employment to deviate from its long-run sustainable level. Even in the short run, however, there is no discernable link between aggregate employment and changes in trade volumes or the trade balance.
China’s financial market is not immune to the external shocks and domestic COVID-19 situation is also putting more downward pressure on growth. In the face of these challenges, China has adopted pre-emptive measures to cope with the situation. Our accommodative monetary policy is stepping up support for the real economy.