Alan Longbon — China Sectoral Flow Investment Assessment

China moving toward fiscal austerity?

Seeking Alpha
China Sectoral Flow Investment Assessment

Alan Longbon

Xinhua — China eyes more proactive fiscal policy

China will pursue a more proactive and effective fiscal policy with government fiscal deficit projected to be 3 percent of its GDP, according to a government work report available to the media on Sunday.

While the deficit-to-GDP ratio stays unchanged from last year, the government fiscal deficit volume is set at 2.38 trillion yuan (about 345 billion U.S. dollars), a year-on-year increase of 200 billion yuan, said the report to be delivered to the national legislature annual session.

In a breakdown, the projected deficit of the central government is 1.55 trillion yuan, and that of local governments is 830 billion yuan.

Keeping the deficit-to-GDP ratio unchanged at 3 percent aims to "allow for further reductions in taxes and fees," the report says.

Tax burden on businesses is expected to be further eased by around 350 billion yuan, and business related fees will be further cut by around 200 billion yuan to benefit market entities.

"We will keep government spending low and enrich our people," says the report, promising that the government will squeeze out more funds to cover cuts in taxes and fees....

China.org.cn
China eyes more proactive fiscal policy

Xinhua

See also

China to pursue prudent, neutral monetary policy

China sets 2017 GDP growth target at around 6.5%

Traditional growth engines, which are losing steam, can regain momentum in the long run only if the country patiently pushes ahead with reforms to foster innovation and encourage industrial upgrading.

Vitality of new growth drivers can be unleashed only if the country continues efforts to streamline administrative procedures and scale back government controls.

Financial risks can be diffused only if the country accelerates reforms in the sector to further regulate market operations, crack down on illegal practices and channel credit to support the real economy.

Private firms can prosper only if the country advances reforms of state-owned enterprises and opens up more sectors to private investment.

Moreover, the impact of protectionism can be mitigated only if the country continues to promote reforms while further opening up its economy to the outside world.

Though these changes are painful at times and their benefits take time to manifest, they are the only way to carry the economy forward.

Deepening reforms the only way forward for China's economy

BRICS Post — China forging ahead with fiscal reforms: Finance Minister

China is forging ahead with fiscal reforms amid a slowdown and the country’s moderately expansionary fiscal policy is a must in coping with downward pressures, Chinese Finance Minister asserted in Beijing on Friday. 

“We must adopt a moderately expansionary fiscal policy in coping with downward pressures, as we de-leverage the economy step by step while preventing it from nose-diving,” said Lou Jiwei at a press conference during China’s annual parliament session. 

The Finance Minister said the actual budget deficit would be around 2.7 per cent of GDP this year....

“The risk of China’s local government debt is generally controllable,” said Lou. 

The Chinese Finance Minister also warned that signs of recovery in the world economy are not obvious enough, including that in the United States, adding that China will be affected by such a “new normal” of the world economy.

The BRICS Post
China forging ahead with fiscal reforms: Finance Minister