China says it will boost fiscal spending in 2023 ‘appropriately’
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CHINA will boost fiscal spending “appropriately” in 2023 to support the slowing economy, focusing on tech innovation and key strategic sectors, the country’s finance ministry said on Thursday (Dec 29).
Chinese leaders have pledged to step up policy adjustments to cushion the impact from a surge in Covid-19 infections on businesses and consumers, at a time when a weakening global economy is hurting exports.
“Proactive fiscal policies will be more effective, precise and more sustainable,” the ministry said in a statement, without elaborating.
“We will maintain the necessary expenditure intensity and will vigorously optimise the structure of spending, and step up support for major national strategic tasks.”
The ministry added that the government will actively support key areas, including science and technology, as well as rural and green development.
China will also improve its policy on cutting taxes and fees next year, and will optimise its policy tools, such as fiscal deficit, special bonds and interest subsidies. The ministry did not give further details.
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Government advisers have urged policymakers to allow the budget deficit in 2023 to increase in order to better support the Covid-ravaged economy.
China has set an annual budget deficit target of 2.8 per cent of gross domestic product (GDP) for 2022, along with an annual quota of 3.65 trillion yuan (S$706.7 billion) for local special bonds to fund infrastructure investment.
China’s tax and fee cuts in recent years have lowered the ratio between tax revenues and GDP to 15 per cent in 2021 from 17 per cent in 2018, said the ministry. REUTERS
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