MNI POLICY: China Says 3.6% Deficit Ratio Feasible, Necessary

By Wanxia Lin

     BEIJING (MNI) - China said its planned record hike of deficit and selling

of a special bond are feasible policies necessary to stabilize its economy after

the coronavirus outbreak.

     The 3.6% deficit/GDP ratio adopted this year is lower than the global

average of about 10% as governments raise debt to deal with the pandemic, Cong

Liang, secretary general of the National Development and Reform Commission

(NDRC), said at a briefing on Sunday. Deficit was planned to be no more than

2.8% last year. 

     China's debt-to-GDP ratio was 38.5% by the end of 2019, below that of major

developed and emerging economies, Cong said.

     China should promote a reasonable debt investment and form effective assets

to boost national assets, said Vice Chairman Ning Jizhe. National assets stands

at CNY1,302 trillion, he said. 

     Here are other key points:

     - This year is the fourth that China skipped an annual growth target since

the reform began in the late 1970s: China also didn't have a formal growth

target in 2000, 2001 and 2002.

     - China added 3.54 million urban jobs in the first four months. The target

of adding 9 million new jobs this year will largely tilt to colleague graduates

and ex-servicemen, while also covering some migrant workers.

     - Over 90% of migrant workers have returned to work, and their incomes will

continue to increase as the economy recovers.

     - Consumption will further improve in May with some delayed essential

purchases to be made up.

--MNI Beijing Bureau; +86 (10) 8532-5998; email: wanxia.lin@marketnews.com

--MNI Beijing Bureau; +86 10 8532 5998; email: william.bi@mni-news.com

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