Chinese Finance Minister Lan Foun will speak at a press conference held in Beijing on November 8th, 2024.
Adek Berry | AFP | Getty Images
BEIJING – China has room to act on fiscal policy amidst domestic and external uncertainty, Finance Minister Lan Foun told reporters Thursday.
He was answering questions at the annual parliamentary meeting of China's “two sessions” on this year's aggressive fiscal policy planning. This year's gathering comes as US President Donald Trump raised his fee for the second time in about a month. Beijing responds to Washington's latest taxation, imposing applicable obligations and restrictions on US companies.
China announced Wednesday that it was increasing its budgetary deficit to 4% of the country's gross domestic product. This is the best since at least 2010.
The government is also planning to issue 1.3 trillion yuan ($178.9 billion) to the Ultra-Long Special Treasury in 2025, marking a hike of 300 billion yuan since last year. The increased amount is primarily set to support consumer trade-in programs.
China said it aims to increase local government special purpose bonds this year by 4.4 trillion yuan, or 500 billion yuan from last year, to ease local government financial stocks.
The country on Wednesday also said it aims to target GDP growth this year and lower its inflation target to 2%.
Officials speaking Wednesday and Thursday stressed that it will take a lot of effort for China to reach its 5% target. China's economy rose 5% last year, but benefited from inactive consumption and strong exports that offset resistance from domestic real estate.
“China has delivered a message to promote growth here. [National People’s Congress]Aaron Costello, Asia Head of Cambridge Associates, says the NPC is part of a “two session” meeting.
Beyond certain stimulus programs, Costello noted that the bigger problem facing China is low business and consumer sentiment. He pointed out last month that Chinese President Xi Jinping would encourage signals such as meetings with many high-tech entrepreneurs.
This fast news article has been updated.
