BUSINESS Muscular fiscal policy needed to spur growth, expert says

BUSINESS

Muscular fiscal policy needed to spur growth, expert says

By Chen Jia | chinadaily.com.cn

10:37, July 30, 2020

Photo taken on July 6, 2019 shows a production line at a subsidiary of Beijing Electric Vehicle Co Ltd (BJEV), a new energy vehicle producer, in Huanghua, North China's Hebei province. (Photo: Xinhua)

China may need to intensify expansionary fiscal policy aimed at accelerating economic growth through issuing more government bonds to secure funds for investment and targeting GDP growth of 2.5 percent this year, according to a leading Chinese economist.

"China urgently needs a growth boost" relying on an accelerated growth of infrastructure investment, said Yu Yongding, senior fellow and academician at the Chinese Academy of Social Sciences. Yu made the remarks at a forum titled "Stronger together: Global recovery from COVID-19" jointly organized by the Chinese Academy of Social Sciences and China Daily on Wednesday.

"Barring a resurgence of COVID-19, China's V-shaped economic recovery will continue, and the economy could post full-year GDP growth of 2.5 percent," said Yu, who estimated growth to continually accelerate to around 6 percent in 2021.

That means the economy has to grow at a rate of about 6 percent in the second half this year. It requires the government to sustain large spending and allow a rise of deficits, or it will be difficult to create as many jobs as planned, he said.

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