Experts see sustainable fiscal spending ahead

The proposed lowering of the deficit-to-GDP ratio to 2.8 percent for this year will make fiscal spending more sustainable, and will not weaken the country's intensity of fiscal spending, political advisers and experts said on Thursday.

Liu Shangxi, a member of the Economic Affairs Committee of the 13th National Committee of the Chinese People's Political Consultative Conference, the country's top political advisory body, said on the sidelines of the two sessions that the proposed lowering of the deficit-to-GDP ratio will make the country's fiscal spending more sustainable.

The draft Government Work Report delivered on March 5 has lowered the deficit-to-GDP ratio target for this year to around 2.8 percent from 3.2 percent in 2021.

The report said the government has been strengthened by the surplus profits of State-owned financial institutions and State monopoly business operations in recent years. They will be used in accordance with the law.

Similarly, funds transferred from the Central Budget Stabilization Fund will go toward fiscal expenditure this year.

The final version of the Government Work Report was expected to be approved by vote by the National People's Congress on Friday.

"Lowering the deficit-to-GDP ratio will improve the sustainability of fiscal policies, and will make room for any complex and challenging situation that may emerge in the future," Liu said.

"Central finance is collecting funds through multi-pronged measures to sustain the intensity of fiscal spending, and form a solid base for the additional tax cuts and refunds this year."

Liu noted that China's proactive and creative fiscal policy is also a testimony to the country's unique institutional mechanisms, which have generated more room for cross-cyclical macroeconomic policies.

He said keeping market expectations stable against a background of ever-changing global dynamics is crucial for steady GDP growth this year.

Su Jingchun, a professor with the Chinese Academy of Fiscal Sciences who specializes in research on income distribution and fiscal spending, said the budget deficit, being part and parcel of macroeconomic adjustment measures, has a bearing on GDP growth-and lowering the budget deficit will create more macroeconomic policy room to protect the interests of all stakeholders.

"By using reserve funds, the increased intensity in fiscal spending can only create more room for future policy maneuvers," she said.