Lou says Beijing is expanding deficit spen… China had budgeted for a fiscal deficit of 2.3 percent of GDP in 2015, he said.
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The annual full meeting of China’s parliament, the National People’s Congress, is expected to draw around 3,000 delegates from all over China to pass bills, approve the budget and endorse personnel nominations.
Chinese leaders, long seen as skilled managers, are scrambling to reassure companies and investors the world’s second-largest economy is on track following stock market and currency turmoil.
Lou told a press conference on Monday morning that raising the deficit ratio would help prevent economic growth from falling too much.
As activity slowed last year, government revenue grew by the smallest percentage in 27 years, the Finance Ministry has said.
On Sunday, the chairman of the Cabinet’s planning agency said there was no danger of a “hard landing”, or dangerously sharp drop in growth.
Starting May 1, the replacement of business tax with VAT will be extended to construction, real estate, finance and consumer services, to ensure that the tax burdens on all industries are reduced, Premier Li Keqiang said in a government work report to the national legislature.
Lou also said the government would arrange funding of 50 billion yuan both this year and next in redundancy payments to workers who will lose their jobs as part of efforts to reduce industrial overcapacity.
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“The central government has room to continue to issue bonds”, he said.
