A view of Beijing’s central business district skyline, captured on February 28, 2023.
Jade Gao | AFP | Getty Images
BEIJING – Chinese state media announced on Friday that the country’s parliament is set to convene for an important session from November 4 to 8, as reported and translated by CNBC.
Investors are keeping a close eye on this meeting of the National People’s Congress Standing Committee, which is anticipated to reveal details regarding a new fiscal stimulus package.
During a committee meeting in late October of the previous year, a historic increase in China’s budget deficit was reported, rising from 3% to 3.8%.
Bruce Pang, the chief economist at JLL and head of Greater China research, emphasized that this parliamentary session will play a crucial role in any potential adjustments to the national budget and fiscal deficit.
He observed that the economic stimulus measures implemented last month underlined the necessity for additional fiscal support.
Earlier this month, Finance Minister Lan Huo’an indicated there is potential to expand the deficit and issue more bonds, while noting that significant adjustments must be addressed before they are made public.
His comments came after a summit hosted by President Xi Jinping in late September, which advocated for more robust fiscal and monetary policies.
In response, the People’s Bank of China has reduced interest rates and continued support policies for the real estate market. Following the late September summit, Chinese stocks have seen significant gains, although trading has been erratic due to the lack of definitive actions.
Pang pointed out that the government will need to carefully assess how the budget modifications are addressed in the forthcoming legislative session, along with the communication surrounding prospective bond issuances.
Analysts have moderated their hopes that a large fiscal stimulus will directly enhance consumer spending, suggesting that underfunded local governments may be prioritized for initial support.
In the first three quarters of this year, China experienced an annual economic growth rate of 4.8%, a slight reduction compared to the 5% growth observed in the first half of the year. The government has set an economic growth target of about 5% for 2024.
