China to Maintain Fiscal and Monetary Policies for the Time Being

Ryu Kun, Minister of Finance, "Will Not Withdraw Economic Stimulus Measures Too Quickly"
Opening of the 5th National Assembly, Confirmation of This Year's Economic Management Direction and the 14th Five-Year Plan

[Asia Economy Beijing=Special Correspondent Jo Young-shin] The Chinese government emphasized that it will continue its existing fiscal and monetary economic policy stance. This means it will not immediately withdraw the economic stimulus measures implemented after the COVID-19 outbreak last year.

On the night of the 2nd, the Chinese Ministry of Finance released on its official website the remarks made by Minister of Finance Liu Kun at the G20 Finance Ministers' Meeting held on the 26th of last month.

[Image source=Yonhap News]

At the time, Minister Liu stated, "Countries around the world need to strengthen macroeconomic policy cooperation," and added, "While comprehensively promoting COVID-19 prevention and economic recovery, we must avoid withdrawing stimulus policies too quickly."

He emphasized, "In 2021, China will continue to implement proactive fiscal policies and moderately accommodative monetary policies, maintaining the necessary level of support for economic recovery."

Minister Liu's remarks came amid expectations that China might shift its fiscal and monetary economic policies this year. Some in China speculate that having stimulated the economy last year by injecting funds, the country now faces debt issues and may seek an exit strategy this year.

In fact, the day before, Guo Shuqing, chairman (minister-level) of the China Banking and Insurance Regulatory Commission, expressed concerns that bubbles have formed in the global financial markets and China's real estate sector. Therefore, the disclosure of Minister Liu's remarks at the G20 Finance Ministers' Meeting by the Ministry of Finance appears to be aimed at calming excessive market anxiety.

Meanwhile, the National People's Congress (NPC) of China is scheduled to open its annual plenary session on the 5th, during which it will discuss and finalize the economic operation direction for 2021, the 14th Five-Year Economic Plan (14·5 Plan), and the long-term economic blueprint through 2035.