China Targets About 6% Growth For The Coming Year
- Posted on December 18, 2019
- Stock Market
- By admin
According to some reports, Asian country, China plans to
target its economic growth a range of 6% in the coming year. This 6% target is
at the low of that of 2019 which was at about 6% to 6.5%. In order to cushion a
sharper slowdown, the country is planning to spend more on infrastructure by
allowing the local governments to issue out specialized bonds in 2020.
According to Reuters, this proposed economic growth target of
6 is going to be unveiled in March 2020 at the country's legislative session;
and was endorsed by top leaders at the annual closed-door Central Economic Work
Conference this month.
According to the news by the State media, the government is
expected to maintain economic growth in 2020 at a reasonable range. The government and central bank will ensure
reasonably ample liquidity, and the further
lowering of import tariff levels. Even though the government plans to
improve the effectiveness of the 2020 fiscal policy, its monetary settings
would still remain prudent.
As China pursues a trade deal with the United State to end
the tariff conflict, domestic policy makers are rather focused on stability and
not artificially boosting the economy as it transitions to a more modest growth
level. Chinese officials are being careful about boosting money stimulus and
are giving a sneak peak that greater impact from fiscal effort than was
achieved by the 2 trillion Yuan of 2019 tax cuts is higher needed. However new
tax fees and cuts for this year has not been mentioned.
Some economists believe that the fiscal deficit ratio, which
is used to determine the amount of support to be given to the economy, would be
set slightly higher in 2020 at 3% of GDP compared with that of 2019 which was
set at 2.8%.
The statement released following the three-day Central
Economic Work Conference did not mention the overall target for GDP growth,
however, the economist believes that the target being placed at 6% is an indication
that the current growth slowdown is likely to continue. This target level is
also likely going to keep the goal of the government doubling the size of its
economy and income over the next decade in perspective. The statement also said
inflation rose after a pig disease caused pork production to crash and prices
to soar, therefore it was necessary to speed up the restoration of hog production
to stabilize the price of pork.
China further said its financial system is healthy and has
the ability to regulate various risks and it is also necessary to keep the macro-leverage
ratio basically stable.
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