China Should Expand Fiscal Policy To Stabilise Growth In H2-Yicai

China should increase fiscal policy intensity to maintain recovery momentum in the second half of the year, including issuing special treasury bonds or front-loading next year’s quota of local government special bonds, Yicai.com reported citing analysts. If without additional fiscal policy to help fill local governments’ funding gap caused by lower land sales revenues and increased spending on pandemic controls, infrastructure investment and economic growth may decelerate in Q4, Yicai said citing Luo Zhiheng, chief economist of Yuekai Securities. Zhu Baoliang, chief economist of the State Information Center believes it requires additional quotas of special bonds from 2023 and CNY1 trillion special treasury bonds to fill the gap in H2, said Yicai.