China´s lawmakers arrive in Beijing for their annual meeting and finance is high on their agenda´s. And opinions are divided, says political analyst Victor Shih to Bloomberg, for example when it comes to the fiscal deficit.
A fiscal deficit target for the year will also be set. Vice Finance Minister Zhu Guangyao has said it will be raised from the 2.3 percent target in 2015, while central bank officials say China can run a deficit of 4 percent of gross domestic product.
The emerging debate on the appropriate level of the fiscal deficit will make the meeting interesting, says Victor Shih, a professor at the University of California at San Diego who studies China’s politics and finance.
“The PBOC argues that the effectiveness of monetary easing is reaching a limit and that fiscal policies are needed to maintain growth,” says Shih. “The Ministry of Finance, meanwhile, argues that the central government’s balance is a bastion for overall confidence.”
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