MNI BRIEF: China Needs Fiscal Stimulus
MNI (BEIJING) - Authorities need to expand fiscal policy to boost infrastructure investment and consumption to ensure the 5% annual growth target is met, following the central bank's recent easing, policy advisors at the Tsinghua PBCSF Chief Economists Forum said on Saturday.
Boosting infrastructure spending in projects including urban sewers and cables was needed to restart the economy in the short-term, given consumption was weighed down by weak income growth and falling asset prices, said Yu Yongding, a former PBOC advisor.
Sheng Songcheng, former chief at the PBOC's statistics department, said authorities must promote consumption through issuing additional special treasury bonds, raising the personal tax threshold to CNY8,000 from CNY5,000, and lowering tax rates for low-income families.
Establishing a national fund for buying unsold housing was needed, Sheng said, adding the PBOC's re-lending tool's interest rate should be reduced to 1% from the current 1.75%. (See MNI EM: PBOC Relending Boost More Effective For Housing - Advisors)