Finance ministry announces plans for additional fiscal stimulus measures in China
China's fiscal health continues to show resilience, with the potential to achieve its budget objectives for 2024 driven by comprehensive government measures. There exists considerable capacity for additional spending and borrowing, alongside ongoing exploration of other policy tools in addition to the counter-cyclical adjustments that have already been considered.
TroibNews 
China's fiscal health remains robust and has the potential to achieve the budget goals for 2024 thanks to the government's comprehensive measures, Finance Minister Lan Fo'an stated on Saturday.
He emphasized that there is substantial capacity for additional spending and borrowing, and that officials are exploring various policy tools alongside the previously discussed counter-cyclical adjustments, as noted by Lan during a press conference.
The minister outlined a series of forthcoming targeted fiscal measures intended to boost growth, increase domestic demand, and mitigate risks. These initiatives involve providing significant assistance to local governments to address hidden debt challenges and issuing special national bonds to bolster the tier-one core capital of major state-owned commercial banks. These measures aim to enhance banks' capabilities in risk management and credit provision, thereby directly supporting the real economy.
Efforts will also focus on stabilizing the real estate market through the use of local government special bonds, dedicated funds, and specific tax policies.
Furthermore, the finance minister shared that there would be increased support for vulnerable groups.
"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," remarked Zhang Zhiwei, president and chief economist at Pinpoint Asset Management, following the ministry's conference.
Bruce Pang, chief economist of JLL Greater China, suggested to CN, "If these targeted policies are swiftly effective, achieving this year’s growth target of around 5 percent is feasible."
Sophie Wagner contributed to this report for TROIB News
He emphasized that there is substantial capacity for additional spending and borrowing, and that officials are exploring various policy tools alongside the previously discussed counter-cyclical adjustments, as noted by Lan during a press conference.
The minister outlined a series of forthcoming targeted fiscal measures intended to boost growth, increase domestic demand, and mitigate risks. These initiatives involve providing significant assistance to local governments to address hidden debt challenges and issuing special national bonds to bolster the tier-one core capital of major state-owned commercial banks. These measures aim to enhance banks' capabilities in risk management and credit provision, thereby directly supporting the real economy.
Efforts will also focus on stabilizing the real estate market through the use of local government special bonds, dedicated funds, and specific tax policies.
Furthermore, the finance minister shared that there would be increased support for vulnerable groups.
"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," remarked Zhang Zhiwei, president and chief economist at Pinpoint Asset Management, following the ministry's conference.
Bruce Pang, chief economist of JLL Greater China, suggested to CN, "If these targeted policies are swiftly effective, achieving this year’s growth target of around 5 percent is feasible."
Sophie Wagner contributed to this report for TROIB News
