(ATF) China will launch a more active fiscal policy as its economy faces increasing downward pressure, Minister of Finance Liu Kun wrote in an article published by the People’s Daily on Thursday.
“At present, China’s economic and social development is still facing great uncertainties, and downward pressure on the economy is still increasing,” he said. “A more active fiscal policy is a practical need to hedge the downward pressure of the economy.”
Liu said China will increase the scale of its fiscal deficit to provide more subsidies and tax reductions to the business sector. He said the government would also boost its investment in infrastructure in order to offset the negative impact of the coronavirus pandemic on the economy.
He added that the government would invest more in projects that can promote advanced manufacturing or improve the supply and demand chains.
China also will implement policies to support the recovery of pig production and guarantee the supply of food and important agricultural products, he said.
Liu said the central government will allocate more resources to the provinces and cities that were hit by the epidemic. At the same time, government officials will further reduce their expenses, he said. The central government will continue to monitor and manage the risk of the local government debts.
Economists have expected that the central government would announce a substantial new stimulus package before or during the “two sessions,” which refer to the annual meetings of the Chinese People’s Political Consultative Conference and the National People’s Congress (NPC), which will start on May 21 and 22, respectively.