Chinese finance minister hints at increasing the deficit at highly anticipated briefing
BEIJING — China's Minister of Finance Lan Fo'an told reporters Saturday during a highly anticipated press briefing that the central government has room to increase debt and the deficit.
He emphasized that the space for a deficit increase is «rather large,» but noted such policies are still under discussion, according to CNBC's translation of the Chinese.
Economists have insisted that China needs additional fiscal support, but Beijing has yet to announce any. In the days leading up to the briefing, many investors and analysts had hoped that China was gearing up to unveil a major new stimulus package.
Lan signaled that the weekend briefing was not the end, that more stimulus is on the way and that the debt or deficit changes markets have been waiting for could come in the near future. It remains unclear whether the size of any such stimulus would meet market expectations, or how much would go directly towards consumption or real estate.
The finance ministry on Saturday also outlined policy measures focused on addressing local government debt problems, stabilizing real estate and supporting employment.
On real estate, the finance ministry will allow local governments to use special bonds for land purchases and allow affordable housing subsidies to be used for existing housing inventory, instead of only new construction, Vice Minister of Finance Liao Min said at the same press conference, according to CNBC's translation of the Chinese.
He added that authorities were considering plans to reduce real estate-related taxes. He did not name specific figures and noted supporting real estate required multiple policies.
«These policies are in the right direction,» Zhiwei Zhang, president and chief economist at Pinpoint Asset
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