What to expect from two sessions

A range of policies and reform measures to stabilize the economy will be discussed during the recent CPPCC and NPC sessions, China Securities Journal website reported on Monday.

China is expected to implement a moderately easy monetary and fiscal policy in 2015.

In order to mitigate the pressure from deflation and lower the financing costs, China's central bank is likely to cut benchmark deposit and lending rates again this year. It has already announced one rate cut this year, on February 28.

China's budget deficit is projected to reach 1.6 trillion yuan in 2015, said China International Capital Corporation Limited (CICC). Local government bond will increase to 600 billion yuan this year and special bonds will be allowed to be issued by local governments.

This year, China will strengthen its proactive fiscal policies, including vitalizing the financial fund stock, attracting social capital to invest in mega projects and deepening reform on taxation, said the website citing an expert.

Hu Zhipeng, economist at UBS Securities, said the central government is expected to support infrastructure development through State-run policy banks like China Development Bank as well as alternatives including introducing Public-Private Partnership and private investment to scoop funds if the local governments lower investment.

Plan to speed up regional development will be unveiled after the two sessions, involving the Yangtze River economic belt, the Silk Road Economic Belt, the 21st Century Maritime Silk Road and the Beijing-Tianjin-Hebei regional integration projects.

Meanwhile, the central government plans to expand free trade zone across the country. Four FTZs in Tianjin, Shanghai, Guangdong and Fujian are expected to start operating after the two sessions, said China Securities Journal.

China also plans to accelerate reform of State-owned assets, taxation and land issues.

CICC said the reform of State-owned enterprises will continue on mixed ownership model as well as supporting employees stock ownership in State companies.

One of the steps that China has taken in fiscal and tax reform has been the implementation of the new Budget Law in 2015. China Securities Journal predicts that environment and building tax will also come into force this year.

China will continue to take measures in 2015 to protect the environment by enforcing measures that save energy and curb pollution, said Haitong Securities.

After the air-pollution control plan, a new water pollution control plan will be released this year while a similar soil-pollution control plan is on its way.