China eyes trillion yuan fiscal stimulus

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September 12, 2015

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China eyes trillion yuan fiscal stimulus

Source: Xinhua | September 12, 2015, Saturday |

Print Edition

CHINA is considering more than 1 trillion yuan (US$157 billion) in fiscal stimulus over the next three years, said a report from the China International Capital Corp.

A total of 1.2 trillion yuan to 1.5 trillion yuan may be taken from the government coffers to replenish the capital for investment projects, mainly those already approved by the authorities, the investment bank estimated.

The stimulus is likely to drive a total potential investment of 5 trillion yuan to 7 trillion yuan in the next three years, or 2.5 percent to 3.4 percent of the 2015 gross domestic product each year, it said.

Investment projects will be funded by not only policy banks but also commercial lenders and private investors via the public-private partnership.

The report came after the Ministry of Finance put forward multiple fiscal policies aimed at stabilizing growth on Tuesday, such as coordinating funds to accelerate project construction, activating idle money and widening tax breaks.

The move indicated that China’s fiscal policy will be “firing on all cylinders to support growth,” CICC said.

China is battling a property downturn, industrial overcapacity, sluggish demand and sluggish exports, which caused growth to fall to 7 percent for the first half of the year.

Fiscal policy has moved to center stage to stabilize growth, as the room for monetary loosening became more constrained, CICC said.

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China eyes trillion yuan fiscal stimulus

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