China has announced a series of new fiscal measures as the country’s economy is set for stable and continued expansion, anchoring growth in global initiatives such as BRICS and the Shanghai Cooperation Organisation.
“A series of fiscal policy measures that are set to be rolled out in the near future are expected to further boost confidence in the Chinese economy,” reported the Global Times newspaper Sunday.
“These measures have significantly lifted expectations for the world's second-largest economy,” the outlet claimed. China trails the United States in gross domestic product (GDP) but became the world’s largest economy as measured by purchasing power parity (PPP) in 2014.
The newspaper claimed the fiscal program would help address local government debt risks as well as stabilize the real estate market. A “crisis” in the Chinese real estate market has been reported in the Western press since 2020, with the collapse of developer Evergrande after a period of rapid expansion making headlines.
Chinese government officials refused to offer a bailout of the company for the sake of private investors, insisting the company must face the consequences of its massive debt.
“It needs to be emphasized that this upcoming policy is the most powerful measure introduced in recent years to tackle [public] debt issues,” said Finance Minister Lan Fo'an at a press conference in Beijing. “This is undoubtedly a timely policy that will greatly reduce the pressure on local efforts to tackle debt issues and free up more resources to develop the economy.”
China will also introduce living subsidies for citizens facing financial difficulties and will increase aid available to college students, Lan said.
“First and foremost, the policies will boost confidence,” analyst Xi Junyang told the Global Times. “As businesses gain confidence, they will expand operations, which will have a positive effect on the economy. They will also have a very important positive effect on the economy with increased fiscal investment resulting from the policy measures.”
China is on target for 5% GDP growth in 2024, the newspaper reported, placing it alongside Russia which is set to expand by almost 4%. Russia has consistently maintained higher growth than NATO adversaries imposing strict economic sanctions on the country, a fact frequently noted by President Vladimir Putin while campaigning ahead of his landslide reelection earlier this year.
The BRICS economic bloc, which is anchored by Russia and China, is set to enjoy faster economic expansion than the G7, it has been reported.