Reuters reported that China is set to unleash fresh fiscal stimulus to shore up its economic recovery, drawing on a well-used playbook that relies heavily on debt and state spending but falls short on the deeper reforms called for by a growing number of analysts. Some government advisers are recommending China lifts its 2024 budget deficit target beyond the 3% of gross domestic product (GDP) set for this year, which would allow Beijing to issue more bonds to revive the economy.
China to choose fiscal muscle over big reforms to revive economy
The world’s second-largest economy grew faster than expected in the third quarter, improving the chances Beijing can meet its growth target of around 5% for 2023. China’s parliament is set to approve just over 1 trillion yuan ($137 billion) in additional sovereign debt issuance when it concludes a five-day meeting that began on Oct. 20.