Fiscal Policy: Fund Utilization More Important Than Fund Input... Indicates Stable Growth
'Above 6%' Target Not Low, But Higher Results Possible
[Asia Economy Beijing=Special Correspondent Jo Young-shin] Premier Li Keqiang of China announced that he will implement economic policies that provide fertilizer to the roots. This means shifting from a focus on high growth to pursuing sustainable and stable economic growth policies.
At the closing press conference of the annual session of the National People's Congress (NPC) on the 11th, Premier Li forecasted this transformation in China's economic policy. The Chinese leadership had previously stated that they would lead China's development through domestic demand activation (dual circulation economic policy).
Regarding the 'V-shaped' rebound of the Chinese economy last year, Premier Li said, "To revive the economy worsened by COVID-19, 2 trillion yuan (approximately 345 trillion KRW) of fiscal funds were used for grassroots resources such as tax and fee reductions and job stabilization," adding that it took about seven days for the government's fiscal funds to reach the people. He further explained that if the fiscal funds had been used for infrastructure or construction investment, it would have taken about 200 days for the funds to reach people's livelihoods.
He mentioned that there was a question about whether the scale and intensity of the policies adopted by the Chinese government last year were too small and low, and explained, "The Chinese government implemented policies in a way that fertilizes the roots, resulting in rapid and effective outcomes." This can be interpreted to mean that while the scale of funds input in fiscal policy is important, how well the funds are utilized is even more crucial.
Regarding the economic growth target of over 6% set for this year, Premier Li said, "I understand that some have evaluated this figure as lower than expected," but emphasized, "Last year, China's GDP exceeded 100 trillion yuan, and 6% of 100 trillion yuan amounts to 6 trillion yuan." He added that growth above 6% is by no means a low figure.
Premier Li acknowledged that "uncertainties about the global economic recovery still exist," but did not rule out the possibility of China's economy growing more than 6%. He cautiously projected, "We are targeting over 6%, but a higher figure may emerge in the actual process."
Premier Li also mentioned concerns and worries about employment. He said, "Following last year, employment pressure will remain high this year," and added, "Among this year's economic policies, we will adhere to an employment-first policy, and the market must also play a leading role."
On the 5th, Premier Li announced in the NPC work report that the goal is to create 11 million new jobs this year.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
