Chinese Finance Minister Lan Fo’an (centre) speaks at a press conference as National Development and Reform Commission (NDRC) Chairman Zheng Shanjie (left) and People’s Bank of China (PBOC) Governor Pan Gongsheng listen, Wednesday, March 6, 2024 in Beijing, China during the National People’s Congress.
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BEIJING – China’s Finance Minister Lan Fo’an told reporters at a news conference on Saturday that the central government has room to increase its debt and deficit.
Such policies are still being discussed, he said. Lan said the four policies that have entered the decision-making stage involve large state-owned banks and youth employment, as well as supporting local governments to deal with debt risks and stabilizing real estate.
Economists say China needs additional fiscal support, but Beijing has not yet announced any measures.
On the real estate front, the Finance Ministry will allow local governments to use special bonds to purchase land and allow affordable housing subsidies to be used on existing housing stock, not just new construction, Vice Finance Minister Liao Min said at the same press conference. housing.
He also said authorities were considering plans to reduce property-related taxes. He did not disclose specific figures, noting that supporting real estate requires a variety of policies.
At a meeting chaired by Chinese President Xi Jinping in late September, authorities called Strengthen monetary and fiscal policy support. But they gave no details.
Analyst forecasts How much fiscal stimulus is needed ranges from about 2 trillion yuan ($283.1 billion) to more than 10 trillion yuan.
Lu Ting, chief China economist at Nomura, warned in a note on Thursday that any such stimulus measures that might be rolled out at a news conference on Saturday would typically require approval from China’s National People’s Congress, which is expected to A meeting will be held later this month. He added that how the funds are used is just as important as the amount delivered – regardless of whether the funds are used solely for support Local government finances are in trouble or focus on Promote consumption.
China’s retail sales have grown only modestly in the past few months, while the country’s real estate slump shows few signs of reversing.
GDP grew by 5% in the first half, sparking concerns that China may not be able to achieve its full-year target of around 5%. All eyes are now focused on October 18, when the National Bureau of Statistics is scheduled to release third-quarter GDP.
Mainland Chinese stocks have turned volatile throughout the week as stimulus-fueled gains lost steam after markets reopened on Tuesday after a week-long holiday. The decline brought the major indexes back to levels last seen in late September.
The stock market was already climbing at that time – the CSI 300 Index Best week since 2008 –Major policy announcements show the Chinese government is finally stepping in to stimulate slowing economic growth.
Just days after the Federal Reserve began its easing cycle, People’s Bank of China cut off some of it interest rate and extending existing real estate support measures for two years. The central bank also launched Approximately $71 billion plan Allows institutional investors to borrow funds to invest in stocks.
The National Development and Reform Commission, the top economic planning body, pledged at a rare news conference on Tuesday to expedite the use of 200 billion yuan originally scheduled to be allocated next year, mainly for investment projects. The National Development and Reform Commission announced no additional stimulus measures.
Saturday is a working day in China, but markets are closed.
This is a breaking news story. Please check back for updates.
