CHINA’S ECONOMIC POLICIES
Chinese Finance Minister Lan Fo’an noted that the central government has left ample room for policy tools to be implemented in the coming year.
He hinted that further stimulus measures could be on the cards, after the government set the 2025 fiscal deficit target at 4 per cent of the country’s gross domestic product (GDP).
“On the one hand, more effort is needed in carrying out the existing policies. We need to implement well the policy package put forward in the fourth quarter last year and make sure of the sustained effect of this policy in 2025,” said Lan.
“On the other hand, more concrete, incremental policy should be designed. We need to make full use of the policy space.”
China has pledged to step up support for the local economy.
On Wednesday, Chinese Premier Li Qiang, detailed China’s economic policies for the rest of the year, unveiling that the world’s second-largest economy will keep this year’s GDP target at around 5 per cent – a goal that some analysts describe as challenging.
“Currently, our forecast is at about 4.2 per cent and part of the reason is because previously we have seen China really pull out a lot of stops in order to hit the 5 per cent growth target in both 2023 and 2024. So they are working off a higher base,” said Heron Lim, an economist at Moody’s Analytics.
“So in order to grow another 5 per cent off two straight years of growing about 5 per cent each, I think that is in itself a challenge.”
