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Free AccessMNI POLICY: China Shuns GDP Target, Raises Deficit to 3.6%
--China's Annual CPI Seen At 3.5%; Monetary Policy To Be More Flexible
--China Aims To Create 9 Million New Jobs
BEIJING (MNI) - China refrained from its usual practice of setting a formal
growth target this year, citing the "great uncertainties" caused by the Covid-19
pandemic on the global economy, according to the annual report to the National
People's Congress presented by Premier Li Keqiang on Friday.
The government stressed that growth is still necessary to support its goals
including ensuring employment and eradicating poverty, Premier Li said.
The fiscal deficit will rise to more than 3.6% this year, Li's report read,
as China will keep fiscal policies "even more proactive and effective,"
increasing the deficit by CNY1 trillion yuan from last year and selling CNY1
trillion in special treasury bonds, the report noted. The target was set at 2.8%
last year.
--FLEXIBLE MONETARY POLICY
China will continue with its stable monetary policy, although it will be
"more flexible and appropriate," Li said in the report. Money supply M2 and
aggregate financing will grow significantly faster than last year, and open
market operations, cutting interest rate and reserve ratios, refinancing and
rediscounting were all among the options that could be used to ensure liquidity
and guide loan rates lower, Li's report read.
The yuan will be kept stable at an appropriate level while the size of the
forex reserve will also be reasonable and appropriate, the report added.
Inflation is expected to be around 3.5%, and the overall pressure is large,
Li said.
--JOBS GROWTH
China aims to create more than 9 million jobs while keeping surveyed urban
unemployment rate at 6% and urban registered jobless rate at 5.5%, Li's report
read. The pressure of ensuring employment has clearly risen, it noted.
The additional CNY2 trillion from the deficit expansion and special
treasury bonds will be given to local authorities in safeguarding employment,
people's basic livelihoods, businesses, tax and fee reductions, rent and
interest rate cuts along with expanding consumption and investment, the report
said.
--MNI Beijing Bureau; +86 10 8532 5998; email: william.bi@mni-news.com
--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com
[TOPICS: M$A$$$,M$Q$$$,MI$$$$,MT$$$$]
To read the full story
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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.