China Faces Tension for a More Aggressive Fiscal Policy as the Economy Expands

  • Finance Minister Liu Kun of China published an article on People’s Daily, stating that with the increasing pressure on the economy, more progressive fiscal policy is needed. This would serve as a protection against the declining country’s development caused by the COVID-19 crisis, which contributed to China’s changes in revenue growth.

     

    China at Present

    At this point, significant risks and vulnerabilities are imposed on the country’s social advancement, with increasing downward pressure on the market sectors.

    Also, in the 1st quarter of 2020, the country’s fiscal revenue demonstrated a negative growth, which is expected to continue presently, showing an overall lower 2020 growth than the prior year.

     

    Moving Forward

    Some key measures that would help would be additional tax cuts for companies to ensure the creation of more jobs to uplift the economy.

    The markets are likewise expecting the administration to declare another stimulus package to relieve the economy that is profoundly affected by the pandemic. This is likely to precede the yearly National People’s Congress (NPC) meeting that begins on May 22.

     

    Market Response

    The earlier remarks have minimal to zero effect on the market sentiment, as it stays driven by the US-China exchange tensions, a second wave of the pandemic, and rising financial harm worldwide.

    Further developments have yet to come as Asian values exchange are trading at a generally lower pace.

     

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