Source: Bloomberg
Author: Miaojung Lin, Jacob Gu
In order to increase economic recovery, China rarely sacrifice a number of financial stimulus measures at the end of the year.
The Standing Committee of the National People's Congress approved the resolution of the State Council to issue government bonds and adjust the central budget plan this year.The Central Finance will issue a 2023 Treasury bond of RMB 1 trillion in the fourth quarter of this year as a special government bond management.The additional government bonds are arranged to the place by transferring payment. This year, it is planned to arrange the use of 500 billion yuan and transfer 500 billion yuan next year.
The Ministry of Finance said that funds will focus on the eight aspects: post -disaster recovery and reconstruction, key flood control treatment projects, natural disaster emergency capacity improvement projects, other key flood control projects, irrigation district construction and reconstruction, key soil and soil loss treatment projects, urban drainage and waterlogging preventionCapacity improvement actions, key natural disasters comprehensive prevention and control system construction projects, northeast regions, and Beijing -Tianjin -Hebei areas such as high standard farmland.
At the same time, the national fiscal deficit will increase from 3.88 trillion yuan to 4.88 trillion yuan, and it is expected that the deficit rate will increase from 3%to about 3.8%.
China rarely announced the issuance of government bonds within the year after the approval of the National People's Congress for approval.Similar measures were previously introduced include the 2008, after the Wenchuan earthquake, and the Asian financial crisis at the end of the 1990s.
In addition, the Standing Committee of the National People's Congress also authorized the State Council to issue the next year's new local government debt limit in advance in the next year.
"China announced its unusual issuance of 1 trillion yuan of government bonds and raised the budget deficit, which is an accidental measure for the market, because Beijing rarely adjusts the budget," Zhang, president and chief economist Zhang of the Insurance Bank Capital Management Company, ZhangZhiwei said, "And the end of the year is coming, even if there is no financial stimulus 5%of the growth goals, it seems that it can be achieved. In any case, I think these policies have taken another step in the correct direction. Under the pressure of shrinking, China should increase fiscal fiscal.Policy support. Some funds will be used next year, so the growth prospects after the fourth quarter can be boosted. "
"The additional fiscal support measures today is an intervention measure in our expected expectations, and it is also to prevent financial tightening in China a few weeks before the end of the year," said Mark Williams, the chief Asian economist of Kaitou.
While announced the adjustment of the budget, the Standing Committee of the National People's Congress also announced a series of decisions after a few days of the meeting.This includes two months after Li Shangfu disappeared from the public perspective, eliminating his posts of state members and ministers of the Ministry of National Defense, and exempt Qin Gang's post.High -level personnel adjustments also include the appointment of Blue Buddha as the Minister of Finance and replaced Liu Kun, which meets the general expectations of the outside world.
These measures show that Beijing's intention to continue to boost the economy through the financial end of the financial end, which also highlights the leadership of the leadership's concerns about the prospects of the growth prospects of this year and next.Earlier in the day, according to people familiar with the matter, Xi Jinping went to the People's Bank of China to investigate. This is the first time he has visited the central bank since he served as President of the State President ten years ago, highlighting that the Chinese government has focused on supporting economic and financial markets.
Bloomberg News quoted earlier this month, quoting people familiar with the matter that the Chinese government was considering increasing the fiscal deficit rate of 2023 and adding government bonds to achieve the official growth goal of about 5%of the year.At the time, Citi Group economists said that if measures taken exceeding the usual debt/GDP target category, "may show a stronger sense of urgency of decision makers" to promote the achievement of growth goals.
Since then, the official economic data that has been stronger than expected in the third quarter said that it is very confident in the ability to achieve economic goals this year.However, multiple challenges may last until 2024, including the continuation of real estate issues and shrinking pressure.Economists are expected to slow down to 4.5%next year.
"Relevant parties must actively and orderly do a good job in the preparation of government bond issuance and project preliminary preparations, coordinate and standardize the use of fiscal funds, strengthen performance management and financial accounting supervision, audit supervision, and take good care of each fund."Chairman Zhao Leji said.
Pantheon MacroeConomics LTD. Chief Chinese Economist Duncan Wrigley said that the addition of special government bonds worth 1 trillion yuan to restore the reconstruction of financing after the disaster, equivalent to an additional financial stimulus of about 0.8%of GDP.He said that the goal is to support the economic recovery in the new year when facing the challenge of real estate construction and export decline.
Injecting funds in infrastructure in infrastructure of government bonds also shows the transformation of policy thinking, that is, the leverage of the central government is used to reduce the financial pressure of local governments.
Beijing has shown increasing determination to help local governments facing fiscal problems: last month, the new round of bonds of China's new round of debt -based debt programs quietly kicked off.
During the weekend, Pan Gongsheng, the governor of the People's Bank of China, made a report on financial work at the Standing Committee of the National People's Congress, promised the stable monetary policy to be "more" accurate and powerful.It is still possible to relax the policy, saying that it is necessary to grasp the counter -cycle and cross -cyclical adjustment, maintain moderate currency credit and stable rhythm.
