BEIJING (Reuters) -China will boost fiscal spending “appropriately” in 2023 to support the slowing economy, focusing on tech innovation and key strategic sectors, the finance ministry said on Thursday.
Chinese leaders have pledged to step up policy adjustments to cushion the impact on businesses and consumers of a surge in COVID-19 infections at a time when a weakening global economy is hurting exports.
“Pro-active fiscal policies will be more effective, precise and more sustainable,” the ministry said in a statement, without elaborating.
“We will maintain the necessary expenditure intensity and will vigorously optimise the structure of spending and step up support for major national strategic tasks.”
The government will actively support key areas including science and technology and rural and green development, the ministry said.
China will improve its policy on cutting taxes and fees next year and will optimise its policy tools such as fiscal deficit, special bonds and interest subsidies, the ministry said, without giving any details.
Government advisers have urged policymakers to allow the budget deficit in 2023 to increase in order to better support the COVID-ravaged economy.
China has set an annual budget deficit target at around 2.8% of GDP for 2022, along with an annual quota of 3.65 trillion yuan for local special bonds to fund infrastructure investment.
China’s tax and fee cuts in recent years have lowered the ratio between tax revenues and GDP to 15% in 2021 from 17% in 2018, the ministry added.
(Reporting by Beijing newsroom and Kevin Yao; Editing by Angus MacSwan and Gareth Jones)
