MNI China Press Digest Dec 12: GDP, Government Bonds, CPI

Highlights from Chinese press reports on Monday:

• China’s 2023 GDP growth target should be above 6% , according to Jia Kang, former director of the Institute of Fiscal Science of the Ministry of Finance. As reported by the 21st Century Business Herald, Jia believes 2022 growth will be around 3%, which sets a low base for next year's target. Jia says the central government should maintain a proactive fiscal policy with the deficit rate exceeding 3% in 2023, and manage the relationship between investment and consumption, whilst boosting private sector confidence. He believes in the short run the resumption of work following the lifting of covid-restrictions should be well managed, and in the long run China's urbanization development potential is a long term engine for economic growth.
• The recent issue of CNY750 billion in special treasury bonds by the Ministry of Finance was mainly to replace maturing bonds this month, but also boosts the link between fiscal and monetary policy for next year, according to the Securities Daily. The paper said given the current low level of interest rates, the issuance supports counter-cyclical fiscal investment and lessens public deficit pressure. It also plays an important role in boosting the economy next year, showing the Ministry of Finance is "implementing a proactive fiscal policy" put forward by the recent Political Bureau Meeting of the CPC Central Committee.
• Despite November CPI rising 1.6% year-on-year, down 0.5pp from the previous month, experts believe overall 2022 CPI will be around 2%, according to the Securities Daily. The paper notes November’s deceleration in price increases was down to seasonal factors such as a slowing in pork price increases and a high comparison base in the same period last year. The paper notes core CPI, which better reflects the overall price level, has been low for three consecutive months, indicating overall prices are stable and that demand is still in the weak, which provides more policy space for promoting consumption.