MNI BRIEF: China Fiscal Policy Remains Strong

China's fiscal resources remain high despite the government announcing a budget deficit of 3% in this year's work report versus 2023's 3.8% after the government issued CNY1 trillion of additional special bonds, according to Huang Shouhong, head of the government work report drafting team.

Analysts should understand a 3% deficit was high from a historical perspective, and was coming from 2023's larger base effect.

On foreign investment, Huang was encouraged by recent international chamber reports that showed positive signs. China would continue to open market access for foreign companies, reduce the negative list, and ensure equal treatment for international firms.

"A lower deficit does not mean fiscal policy will be less intensive than last year," Huang added.

MNI reported last year authorities would set the fiscal deficit at 3-3.5%. (See MNI: China To Pursue Moderate Policy Support In 2024)