Make Use Of Fiscal Space - Guan Tao

China should make use of existing fiscal and monetary policy to respond to economic difficulties, according to Guan Tao, former director at the State Administration of Foreign Exchange. Guan noted policymakers are not constrained by inflation which allows them space to intensify monetary and fiscal measures. Although the government did not meet market expectations to increase the deficit ratio and issue more special government bonds, the measures to accelerate local government special bonds issuance and improve tax policies had made a difference. In future, Guan expects further policy announcements on local government debt reduction plans, noting the central government has a low debt burden and therefore has room to deal with local fiscal risks. (Source: Yicai)