SCIO briefing on 2016 Govt Work Report
china.org.cn / chinagate.cn, March 7, 2016 Adjust font size:
Lianhe Zaobao (Singapore):
You just mentioned fiscal deficit, which has grown one-third over last year, while central budgetary investment also increased by 500 billion yuan (US$76.6 billion) this year. Should this be viewed as a package of strong stimulus policies in a bid to avoid a “hard landing” of the Chinese economy? Thank you.
Huang Shouhong:
The deficit to GDP ratio has grown from the 2.3 or 2.4 percent last year to 3 percent this year. In my view, this is not evidence of a strong stimulus plan In terms of its intensity. Lots of countries, such as many in the European Union and the United States, have a ratio of above 3 percent. The ratio in Japan remains at 7.1 percent, and the ratio in the United States hovered around 5 percent in 2014 and 2015. Let’s look back to when the global financial crisis erupted. At that time, the fiscal deficit to GDP ratio of the United States went up to 12 percent and many countries in the European Union reached 10 percent. Therefore, the 3 percent in China is safe. Besides, I don’t think it is a strong stimulation considering its modest size.
Today, a big concern over China’s economy generally focuses on the constantly intensified downward pressure: what is about the future of the trend and what will be the countermeasures? I cannot talk too much due to the restriction of time. But what I really want to tell you is that, despite the huge downward pressure of the economy in previous years, the Chinese government did not adopt such strong stimulus plans as quantitative easing policies; instead, it mapped out constant structural reforms to spur internal vitality. With the application of such measures, we have been able to maintain good economic growth and thereby are well prepared for the risks and challenges posed in this and coming years. There are still sufficient bullets left in our rifle after a few shots targeting improvement of our economy have been fired. The metaphor is, as a result, to show the Chinese government has enough countermeasures in its toolbox of innovative policies to tackle any downward pressure. There are enough tactics as well as arms and we are waiting for the right moment to act.