China_Announces_New_Fiscal_Stimulus_Measures_to_Boost_Economic_Growth

China Announces New Fiscal Stimulus Measures to Boost Economic Growth

China Announces New Fiscal Stimulus Measures to Boost Economic Growth

China’s fiscal health remains strong, and the nation is poised to meet its 2024 budget goals through comprehensive government measures, Finance Minister Lan Fo’an announced on Saturday. Speaking at a press conference, Lan emphasized the significant room for further spending and borrowing, indicating that additional policy tools are under consideration alongside previously discussed counter-cyclical adjustments.

The minister outlined a series of targeted fiscal initiatives aimed at stimulating growth, expanding domestic demand, and mitigating financial risks. Key among these initiatives is substantial support for local governments to address hidden debt issues. The government plans to issue special national bonds to bolster the tier-one core capital of major state-owned commercial banks, enhancing their risk management and credit provision capabilities to directly support the real economy.

Efforts will also focus on stabilizing the real estate market. This will involve deploying local government special bonds, dedicated funds, and specific tax policies to invigorate the sector, which is a crucial component of China’s economic landscape.

In addition, Lan announced increased support for vulnerable groups, underscoring the government’s commitment to inclusive growth and social stability.

“The key messages are that the central government can issue more bonds and raise the fiscal deficit, and the central government plans to issue more bonds to help local governments pay their debts,” Zhang Zhiwei, president and chief economist at Pinpoint Asset Management, told the South China Morning Post following the ministry’s conference.

Bruce Pang, chief economist of JLL Greater China, expressed optimism about the impact of these measures. “If these targeted policies are swiftly effective, achieving this year’s growth target of around 5 percent is feasible,” Pang told CGTN.

The announced fiscal measures come at a pivotal time as China seeks to navigate complex economic challenges while maintaining steady growth. The government’s proactive stance signals a commitment to deploying a range of policy tools to ensure economic vitality and financial stability in the coming year.

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