China still has fiscal policy space and tools to offset increased economic downward pressure, and it is unlikely to issue special treasury bonds in the rest of the year, Securities Times reported citing analysts. Choosing to issue such bonds will instead disrupt market expectations and feed through fiscal debt risks, the newspaper said citing Wu Chaoming, vice president of Chasing Institute. Though the budget deficit-to-GDP ratio was set as 2.8% earlier this year, the actual fiscal strength is sufficient and equivalent to a deficit ratio of 3.8% when taking into account profit turnover by SOEs, and the excess balance of last year, the newspaper said citing Zhang Yu, chief analyst of Huachuang Securities.
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