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China's Finance Minister Says Government Has Room to Increase Debt, Deficit

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China,Economy,Fiscal Stimulus

China's Finance Minister Lan Fo'an stated on Saturday that the government has the capacity to increase its debt and deficit to support the economy. While no specific figures were announced, he mentioned four policies nearing a decision stage, focusing on state-owned banks, youth employment, local government debt risks, and real estate stabilization.

China's Minister of Finance Lan Fo'an is holding a press conference on measures to support the economy.

Analyst projections for how much fiscal stimulus is needed range from around 2 trillion yuan to more than 10 trillion yuan. He said such policies were still under discussion. Four policies that have reached a decision-making stage covered major state-owned banks and youth employment, as well as support for local governments to address debt risks and stabilize real estate, Lan said.

Ting Lu, chief China economist at Nomura, had cautioned in a note Thursday that any such stimulus that could come during the briefing on Saturday would typically need approval by China's parliament, expected to hold a meeting later this month. He added that how any funds are used is just as important as the amount that's delivered — whether they only go to shoring up

 

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