China’s parliament is gearing up for a crucial meeting set to take place from November 4 to 8, as reported by state media. Investors worldwide are eagerly anticipating the outcomes of this gathering, especially with expectations of potential fiscal stimulus announcements.
Last year, the standing committee of the National People’s Congress made headlines when they approved an increase in China’s fiscal deficit from 3% to 3.8%. This move was seen as a significant step towards supporting the country’s economy in the face of challenges.
According to Bruce Pang, Chief Economist and Head of Research for Greater China at JLL, the upcoming parliamentary meeting is a crucial part of the process if China decides to make adjustments to its national budget or deficit. Pang emphasized the need for more fiscal support, especially given recent stimulus measures implemented by the Chinese government.
In a recent statement, China’s Minister of Finance Lan Fo’an hinted at the possibility of increasing the deficit and issuing more bonds to boost the economy. This aligns with the directives set forth during a meeting led by President Xi Jinping in late September, which underscored the importance of strengthening fiscal and monetary policies.
The People’s Bank of China has already taken steps to cut various rates and extend support policies for the real estate sector. As a result, Chinese stocks have experienced a surge in the past few weeks, although trading has been volatile in anticipation of concrete measures.
Analysts are cautious in their expectations, noting that any fiscal stimulus is likely to prioritize supporting struggling local governments rather than directly boosting consumption. With China’s economic growth slowing to 4.8% in the first three quarters of the year, achieving the target of around 5% growth for 2024 will be a key focus for policymakers.
As the parliamentary meeting approaches, all eyes are on how China will adjust its budget, issue potentially planned bonds, and navigate the path towards sustainable economic growth. Stay tuned to Extreme Investor Network for the latest updates and insights on China’s evolving economic landscape.