China to Implement Targeted Fiscal Measures to Boost Economy

China is set to roll out a series of targeted fiscal policy measures aimed at stabilizing the economy, increasing domestic demand, and addressing financial risks, as announced by Minister of Finance Lan Fo'an during a recent press conference.

New Fiscal Package Details

The upcoming fiscal package will feature a significant increase in the debt ceiling, allowing local governments to replace existing hidden debts. This is expected to mitigate debt risks and provide a more stable financial environment.

In addition to enhancing local government finances, the package will include the issuance of special treasury bonds. These bonds will support major state-owned commercial banks in boosting their core Tier 1 capital. By increasing their capital base, these banks will be better equipped to manage financial risks and expand their credit offerings.

Real Estate and Consumer Support

To bolster the real estate market, the fiscal measures will employ a variety of tools such as local government special bonds, special funds, and tax policy adjustments. The goal is to stabilize the market and prevent any further decline that could exacerbate financial instability.

The minister also highlighted the intention to provide increased support for vulnerable populations. Ahead of National Day, one-time living allowances were distributed to disadvantaged groups, and there are plans to enhance this support further. This includes providing awards and aid to students, which is aimed at increasing overall consumption capacity within the economy.

Future Adjustments and Monitoring

While these four policy measures are currently in the decision-making stage, the minister indicated that the government is open to considering additional tools as necessary. The central government still possesses considerable flexibility to borrow more and increase the budget deficit if needed to support economic growth.

Through these initiatives, China aims to create a more resilient economy capable of weathering current challenges while stimulating growth and maintaining stability.

China, Fiscal, Economy