China should increase fiscal spending sharply, bringing the budget deficit to 5% of GDP. This was reported by Bloomberg.
According to Chinese economist Jia Genliang, against the background of the trade conflict with the West, China needs to focus on domestic demand and economic growth through the domestic market. He recommended that the government actively employ workers in the public sector and significantly increase government spending to increase the income and consumption of the population.
According to the analyst, China should not fear a decline in its trade surplus in the context of protectionism in the West, as the country can offset the decline in exports by increasing its budget deficit. The increase in deficit and government spending will effectively support demand in the economy and citizens’ incomes.
The economist noted that China’s budget deficit has recently increased to 3.8% of GDP, which is the right decision to help boost economic growth. However, in his opinion, this is still not enough and the deficit threshold needs to be increased to at least 5% of GDP.
Before this, it was known that the debt crisis in China could arise. to manage to regional banks amounting to trillions of yuan.
Previously Chinese economists prohibited talk about the problems.
Source: Gazeta
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