CHINA-ECONOMY: CHINA'S FINANCE MINISTER LIU KUN CALLS FOR MORE PROACTIVE FISCAL POLICY
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China's Minister of Finance Liu Kun published an editorial in People’s Daily (May 14) signalling a more proactive fiscal policy. Among the main points he made are:“[We will] widen the deficit and send a clearly positive signal…to stabilise and boost market confidence.”; "[We will] focus on reducing the tax burden on small and medium-sized enterprises…and industries which have encountered difficulties.”; and “[We will] continue to implement the policy of lowering the value-added tax rate and enterprise’s pension insurance rates and appropriately extend some temporary tax and fee reduction policies.” He also assured that the government will ramp up investment in a targeted way in key investment areas, which include advanced manufacturing, facilities that improve people’s livelihood (e.g. hospitals), and weak links in existing infrastructure. Liu Kun also urged local governments to maintain fiscal discipline saying “[We will continue to] prevent and mitigate hidden risks of government debt, improve the regular monitoring mechanism of local government debt, and strengthen supervision of local governments.”
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