According to some reports, Asian country, China plans to target its economic growth a range of 6% in the coming year. This 6% target is at the low of that of 2019 which was at about 6% to 6.5%. In order to cushion a sharper slowdown, the country is planning to spend more on infrastructure by allowing the local governments to issue out specialized bonds in 2020.
According to Reuters, this proposed economic growth target of 6 is going to be unveiled in March 2020 at the country's legislative session; and was endorsed by top leaders at the annual closed-door Central Economic Work Conference this month.
According to the news by the State media, the government is expected to maintain economic growth in 2020 at a reasonable range. The government and central bank will ensure reasonably ample liquidity, and the further lowering of import tariff levels. Even though the government plans to improve the effectiveness of the 2020 fiscal policy, its monetary settings would still remain prudent.
As China pursues a trade deal with the United State to end the tariff conflict, domestic policy makers are rather focused on stability and not artificially boosting the economy as it transitions to a more modest growth level. Chinese officials are being careful about boosting money stimulus and are giving a sneak peak that greater impact from fiscal effort than was achieved by the 2 trillion Yuan of 2019 tax cuts is higher needed. However new tax fees and cuts for this year has not been mentioned.
Some economists believe that the fiscal deficit ratio, which is used to determine the amount of support to be given to the economy, would be set slightly higher in 2020 at 3% of GDP compared with that of 2019 which was set at 2.8%.
The statement released following the three-day Central Economic Work Conference did not mention the overall target for GDP growth, however, the economist believes that the target being placed at 6% is an indication that the current growth slowdown is likely to continue. This target level is also likely going to keep the goal of the government doubling the size of its economy and income over the next decade in perspective. The statement also said inflation rose after a pig disease caused pork production to crash and prices to soar, therefore it was necessary to speed up the restoration of hog production to stabilize the price of pork.
China further said its financial system is healthy and has the ability to regulate various risks and it is also necessary to keep the macro-leverage ratio basically stable.