(Bloomberg) Liu Kun, China’s finance minister, reaffirmed plans to prudently increase fiscal spending in order to support economic recovery while committing to avoid systemic dangers.
According to Liu, China’s recovery is still not strong, according to an interview with the official Xinhua News Agency on Tuesday. He listed dangers like a decline in demand and supply disruptions.
The government has to raise fiscal spending, use the earnings from special government bonds to stimulate investment in more places, and increase transfer payments to less developed areas, according to the finance head.
The government has to raise fiscal spending, use the earnings from special government bonds to stimulate investment in more places, and increase transfer payments to less developed regions, according to the finance head.
In addition, Liu promised to stop systemic dangers from government debt. With outstanding government debt at below 60% of GDP, which is lower than in large economies, he claimed that dangers are manageable. According to Liu, the nation will move forward with reforming local government finance platforms in a way that is focused on the market.
According to Liu, who didn’t go into further detail, China will assure adequate budgetary spending on COVID restrictions.
2022 saw China rely on domestic debt-fueled infrastructure spending to support development as the country’s economy was pummelling by cholera outbreaks, a real estate crisis, and a deteriorating outlook for its main trading partners.
Top leaders have pledged to keep public expenditure at a “required” level in 2023, but the room for more fiscal stimulus is dwindling as municipal finances are experiencing unprecedented stress and their debt loads are becoming unmanageable.
